| |
|
|
Top Ten Things
That Cause a
Loan
to Fall Through |
|
| |
|
| 1. |
Unrealistic expectations about what the borrower can afford. If there is a question about whether or not you may qualify, it should be strongly suggested you take advantage of a borrowing power estimate or credit pre-approval program. |
| |
|
| 2. |
Inadequate preparation by the borrower prior to application. Real estate professionals and loan officers work together to help you. The more information you have available at application, the more complete the loan officer's analysis can be. |
| |
|
| 3. |
Recognizing that borrowers may need loan programs explained. Industry jargon about an index, margin, T-bills and other terminology is familiar to real estate and mortgage professionals. But they have to remember that not everyone has an in-depth understanding of the potential impact on loan terms. |
| |
|
| 4. |
Self-employed borrowers may not realize that they are "self employed". Consequently, you need to be aware that ownership of 25% or more in a company or commissioned income means different documentation requirements. Communicating this could mean that the issue is resolved before the loan comes to underwriting. |
| |
|
| 5. |
Government loans with property problems or repair conditions need to be discussed by all parties before closing. Frequently, this means that the question of who pays for the repairs must be addressed. |
| |
|
| 6. |
Third party vendors who do not deliver on a timely basis. Credit reports are not the issue that they were in past years, but appraisals can be. "It's in the mail" excuses prevent timely turnarounds. |
| |
|
| 7. |
Lack of understanding by applicants about what happens during the processing, underwriting and closing of a loan. Explanation of time frames, documentation and responsibilities of all parties is critical. |
| |
|
| 8. |
Credit explanations which are not adequately documented and supported or which do not relate to the dates of delinquencies in the credit report. |
| |
|
| 9. |
Funds to close verified and adequately tracked. Gift funds, for example, must have donor's ability to give the gift as well as showing the money going from donor to recipient. |
| |
|
| 10. |
The biggest problem of all, however, is lack of communication. Many parties are involved in each transaction--buyer, seller, real estate agent, mortgage banker, appraiser, attorney and settlement agent. Each party must have complete understanding of what is going on at any given time. |
| |
|
Mortgage Tips
