How can I qualify? A recent question from Ann. Part 1 of 4
First a related Tip: Be careful, Ann was an open invitation to get soaked in the amount of fees she would be charged. She may have not known she could have been charged over $12,000 in origination fees because she was in a vulnerable, needy situation. This mind you, was on a $300,000 loan. I make this as a point of why you choose loan officers carefully. It is one of the purposes of this forum.
In this 4 part series I expose special programs, expose bad practices, and tell you of a good lender. Ann (name and minor facts changed of course) called me a few months ago. She was in urgent need of a refinance to take someone off title on her home. She was going back into the work force after a long period of being a stay at home mom. She had been a well paid technologist but now wanted to try her hand at sales. She had just received her first commission.
Her question to me went something like: I have to refinance. How will I be able to do this? I am told I need a two year earnings history to qualify. I am told lenders average my last two years income after expenses. I just started, how can I qualify? I must qualify.
I asked Ann a few questions including: do you know what your FICO score is? Answer: Around 700 I think. How much equity is in your home? It turned out to be about 33%. Do you have enough cash reserves in the bank to cover 6 months of mortgage payments? Yes.
Ann’s’ loan closed a few weeks ago. I called a wholesale lender I trusted and reviewed the details. Knowing she could qualify for a special program, I then advised a local mortgage company I have had experience with, about the program Ann qualified for. They closed her loan at a great Wholesale Bank, Aurora Mortgage. http://www.auroramortgage.com/ Note, to get a loan with wholesale mortgage banks like Aurora Mortgage you apply with a bank or mortgage company that has a mortgage broker contract with them.
This actually turned out to be easier for the mortgage company I sent her to than a typical loan would have been. The standard, conventional, loans require documentation they were able to waive for Ann. Ann paid a little higher rate than conventional market rates, but not much higher.
Soon part 2: Why was the loan so easy? Part 3: How could she have been overcharged? Who else is typically vulnerable to being overcharged? Part 4: How do I find the right loan officer and lender?
PS: If you need help right now, email me at larry@MortgagesUndressed.com. Just as I did not charge Ann, I won’t charge you. And for sure, you won’t become a lead.
[…] To Scene 1 of Ann’s story […]
[…] Some non conforming loans have a requirement you have 6 months of your payments in reserve at the time of the loan application, and that will be in your cash reserves after closing. Why such a rule? Experience. They understand moving in has hidden costs. They want to make sure you have extra money to make your mortgage payment. An example of this, was the loan in Ann’s Story. The next reason is peace of mind. Forget the mortgage, when you have reserves you have more peace of mind. If you have a family, it rubs off on their peace of mind. Getting there slowly is still a positive thing. Spend less each month than you earn. […]
[…] In each story I was writing about strong independent women. Yet, each needed information. One that I am sure would have been taken advantage of by a large part of the lending world is Ann. (Name changed) Another, a recent story was the about the story in Reno. This woman was plainly frustrated and looking for confidence in her search process. […]