Getting a loan is difficult, but not hard to understand. Since the banking meltdown, it is harder to get a home loan, but most of the ambiguity is gone. You either qualify or you don’t, but why you don’t can be clearly explained so that you have a “to-do” list that at the end of which you WILL get your loan. I can guarantee that for you. Lenders still want to make money and home loans are a large part of their business, for mortgage bankers and brokers it’s their only business.

Lenders don’t care about any color but green. They used to but not anymore. They are going to look at your job history, income, bill history, credit score and how much you want to buy. Based on the available programs, they’ll see if they can get you a loan. Most lenders, especially mortgage bankers, specialize in only home loan products. Most specialize in only some of the loan products and do them better than their competition because they understand them better. For instance, they may be a FHA and VA expert or a first time buyer loan expert. If you feel like they are not paying attention to you, it’s more likely that they don’t know how to service your particular situation. If you’re getting turned down there is probably a good reason.

RULES WE HAVE TO LIVE BY…AND SO DO THE LENDERS.

1. If you have a credit score below 600 you don’t get a loan. If its 620 and you’re a first time borrower or buying rurally, there’s very little flexibility there.
2. Lenders have only a little bit of flexibility in their guidelines. Good lenders stretch the limits of flexibility as much as they can.
3. The more trouble you have with your credit, the more likely you are only a candidate for a FHA or VA loan.
4. The less money you have to work, with the more likely you are a candidate for a FHA or VA loan.
5. First-time buyers can usually get in a house for less than $1,000.
6. All loans are sold after closing (with the possible exception of B of A), and are serviced by big mortgage servicing centers located around the country. The idea of a local lender servicing your loan is in the past.
7. All loans are packaged and sold as securities. To be packaged together, they have to be identical in their guidelines.
8. It does not cost anything to get pre-approved, regardless of what a lender says.
9. Once you are pre-approved, it is valid until you change your financial picture by changing your employment, adding new debt, or not paying your bills on time.
10. You will lose more money in this process than any other of the home buying processes.
11. Your agent should help you find the best lender for your needs. Anybody can show you property. If they are not clued into you loan needs, how are they going to help you write the contract?
12. Almost all lenders follow the Fannie Mae or Freddie Mac underwriting guidelines. The difference is which lenders understand them better.

With these facts, you are now prepared to learn about loans and understanding the process of getting one. Click on other parts of the lending tree to learn about them. You should never go looking at houses without the loan issues worked out. It’s a waste of your time and your agent’s time. Any good agent would say the same.

If you have questions or need help email me via [email protected].