Getting a mortgage isn't just about whether you can qualify. It's also about whether you can work well with your loan officer, making the process smoother and easier for both of you. Ideal customers are not only financially well-positioned, they're also knowledgeable, realistic and cooperative. Conversely, no matter how qualified you are to get a mortgage, your loan might never close if you ignore instructions and treat your mortgage lender like a misbehaving puppy.
Some people get it. Some don't. You don't have to have perfect credit or super-high income to qualify. It's really more about the attitude than just your finances. The number one reason loans don't close on time is because of a non-cooperative borrower. One of my Lender's asked a customer, 'Can I get your two most recent paystubs?' and an hour later, I they had them. The next customer, it's two weeks and the lender is still begging."
With that in mind, here are nine ways you can become your mortgage lender's favorite client:
No. 1: Be well-qualified to get a mortgage
You don't need an 800 credit score to get a home loan. Nor do you need a 20 percent down payment to buy or 20 percent equity to refinance. Still, hitting those numbers -- or close enough -- certainly doesn't hurt your chances. Many borrowers have excellent credit, plenty of cash and at least a small down payment or some equity in their home.
"The ideal person has a good credit score, good down payment, low debt ratio, been at their job forever, no bankruptcies, no foreclosures -- just a straight-up regular good person," My Lender says.
No. 2: Don't be clueless about your credit
Some borrowers are overconfident. Others genuinely aren't sure whether they can qualify. Neither is a problem for lenders. The true troublemakers are those who know they don't have a prayer, yet make the call anyways. If you've never paid anybody on time ever in your life and you have a bankruptcy from last month, thinking you can get a loan and calling a lender is nothing but a waste of time for everybody.
No. 3: Respect your loan professional
The best mortgage customers come from referrals because they bring an attitude of trust to the relationship from the start. Whether the referral comes through a financial planner, real estate broker or next-door neighbor, it tends to create a much better working relationship. When the client has the approach of working with an expert and is appreciative of your stature, that just makes for a better experience for both the lender and the customer. You're really doing business together.
No. 4: Don't be angry and confrontational
Qualifying for a loan isn't that hard, but a lot of paperwork is required. Before your loan can be approved, every "i" must be dotted, "t" crossed and checkbox ticked. There are no exceptions and arguing doesn't change that. Realtor's or Lender's don't enjoy being questioned and yelled at by people who are annoyed at lender requests. Lender's request documents for a reason. They explain on a regular basis: 'This isn't Joe's rule. It's not Mortgage Unlimited's rule. It's the rule.'"
No. 5: Be educated about mortgage basics
Lender's generally like a mortgage-educated customer. An educated customer already understands basic concepts which allows the lender to help, guide and coach them rather than trying to explain that they are not a crooks.
What's a basic concept?
One is that no-closing-cost loans don't actually exist. The costs you don't pay upfront are hidden in a higher interest rate or larger loan amount.
No. 6: Don't be an overly aggressive rate shopper
Most borrowers understandably want the lowest interest rate and fees they can get, and shopping for the best mortgage rates is certainly how to go about it. But some borrowers are downright aggressive about rate-shopping, making themselves nuisance customers. In fact, that super-low rate doesn't really exist. Our market is so competitive that rates and fees are all so close from company to company. There's not some magic pool of money that's cheaper.
No. 7: Be open and honest
Giving the lender all the facts about your financial situation upfront is a huge help. What matters is the client telling the lender everything they know upfront, providing all the paperwork needed as quickly as possible and being open to the fact that their going to ask for additional paperwork.
What information is important?
Examples include a prior bankruptcy or foreclosure or a recent gap in your employment history.
No 8: Be cooperative about following instructions
When lenders ask for documents they're usually very specific about what they want. It's up to you to comply rather than try to take shortcuts. Bank statements are a good example.
If they ask for two months' bank statements with all the pages and you send a web printout showing you have the money in your account, that's nice, but what they actually need is two months' bank statements with all the pages.
No 9: Don't be uncooperative about requests for documents
Nightmare customers refuse to hand over personal financial documents that are necessary to close their loan. Many of the additional items a lender asks for sometimes don't make sense to the average person. There was so much fraud six or seven years ago that today every loan goes through the deepest of scrutiny. Delays are especially problematic if you're buying a home or your rate lock is about to expire.
When a client resists and we're struggling to get the paperwork, that ends up creating a lot of stress for both the client and the lender, as well as the Realtor representing the Buyer. The bottom line is that lenders appreciate clients who have a positive attitude as well as a strong financial position. If you're a terrible customer, you might still get a loan, but it won't be a good experience for you, your lender or your Realtor.
Priding myself on being "The Source of the Source" in AZ Real Estate, I have access to many lenders who are and have been very helpful and informative as well as successful at successfully completing approval loans for all my Buyer clients.