When I answered the phone, the fear and frustration were palpable. The young man went on to explain that after nearly two months of underwriting with another lender, his loan had just been officially declined on the eve of his home closing date. He had received the call from his lender while driving cross country with his family in the moving van, packed up and ready to be unloaded at his new home the next day.
As we spoke, he vacillated between curse words and tears.
It turns out his loan officer had failed to calculate a full payment on his student loans that were currently in IBR (Income Based Repayment) with a zero monthly minimum. When the loan finally made its way to the underwriter, she had not made the same mistake and after several rounds of back and forth providing more and more documentation, eventually the loan was declined due to “an excessive debt-to-income ratio”.
That would have been nice to know before he wrote an offer, paid for appraisals and inspections, and allowed his earnest money to go non-refundable!
The story ends up having a happy ending, as we were able to guide him into a medical professional home loan program that allowed us to qualify with the zero-monthly minimum IBR payment. Within a few weeks we were able to close on his new home. Watching his family finally move into their new home was pretty cool, I have to say.
After reflecting on this family’s case and how they ended up going through such a miserable experience buying their first home, it became abundantly clear why our process is vastly easier and safer for medical professional clients.
You see, with most mortgage banks and brokers, your loan doesn’t make its way to the mortgage underwriter until the eleventh hour, which literally could be the week you are trying to close on your home. Banks and brokers do this to save costs; obviously, they don’t want to spend money having an underwriter review your loan if the inspection, appraisal, title report, or anything else is going to come back poorly and you end up pulling out of the transaction.
In an effort to save paying the underwriter to review the loan on loans that don’t close, they can inadvertently put the client at substantial risk. If the loan officer has missed anything (like the payment on your deferred or IBR student loans), the underwriter likely won’t catch it until you are deep into the transaction.
Rescheduling movers, finding temporary housing, explaining all of this to your kids, and hoping it’s all going to be OK… Not something you want to experience personally.
Our process is different. Many years ago we re-engineered the loan process to have the underwriter review the loan and the minute details of the borrower before we even issue a pre-approval letter.
Once a client has gone through our preliminary Credit and Income Approval process, they have been approved as a borrower and the only thing left for us to complete is the underwriting of the collateral (home).
Not only does this process virtually eliminate the chance of being surprised by an underwriter decline late in the loan process, it also enables you to write a much better offer.
As you can see in the graph below, housing supply has been dwindling since December, and looking at the last three months (most current data available) the supply of homes on the market is less than it was last year at the same time.
The lower housing supply numbers means more competition for fewer homes, and with interest rates at multi-year lows, the demand for housing is likely to continue.
The advantages of completing the full Credit and Income Approval process:
- You are able to write a much more appealing offer and in most cases close as fast as a cash offer. This is because your loan has been fully reviewed, all critical documents received, and signed off. This allows us to close loans in as little as seven to ten days in some instances.
- You can tell the seller that you are not just fully pre-approved, you are literally approved. The loan has been approved by underwriting and all we have to clear is the title, appraisal, and insurance, (typical items we need for the final underwriting of the property).
- No last minute surprises, no temporary housing, and no disappointed kids when your family cannot move in on time.
The stakes are high. There’s little to no room for error and it’s up to us to make sure we guide you through the landmines for a flawless home buying experience.
Why not use the best home search technology available. We advise clients to stay off of the typical media sites like Zillow, Trulia, and Realtor.com because those websites do not have direct access to all MLS (Multiple Listing Services), which is what Realtors have access to.
These media companies have some but not all of the data listed on the MLS, and most of what they have is delayed by up to twenty five days, meaning your dream home might be on the MLS today but you may not see it for weeks. We suggest clients download and use
HomeScout because it will give you access to one hundred percent of the MLS listed homes and gives you the exact same power that a Realtor has to search for a home.
We believe you deserve transparency, human connection, and a team committed to deliver more than what was promised. We’re committed to help you make great financial decisions and realize your dream of home ownership.
We exist to simplify and humanize the mortgage experience because you don’t need any more stress in your life.