20 Nov Q & A w/Mortgage Professional, Lori Martin of Fairway Mortgage:
Today I’m doing a brief interview with Lori Martin of Fairway Mortgage. There are a few things that each buyer needs to know that they can and can not or should not do once their loan process has started … here we go:
Me: Hey Lori … thanks for meeting me today. I appreciate your time.
Lori: Thanks for having me! We should go to lunch after this!
Kim: So what is the first thing you tell your clients when you get started on their mortgage application?
Lori: Please don’t change or quit your job! While it is not a deal-killer to change jobs – it can just make things a little tricky as far as documentation. Definitely check with your loan officer before making any changes. For instance, changing from a salaried position to another salaried position with a new employer is normally accepted but changing from salaried employment to a consultant (W2 to 1099) would not be acceptable. Also please remember we reverify that you are still an active employee right before closing – so if you are planning to retire or change companies, please don’t think once the loan is approved you can make those transitions.
Me: Well .. that is one very important detail! Some clients start to get really excited and want to go out and buy new furniture, etc. Do you talk to them about their spending habits?
Lori: Oh yes! We advise buyers not to make any major purchases prior to or during your loan process – such as a new car, furniture, appliances, etc. A final credit report is ordered 3 days prior to settlement and if a new large purchase is discovered it could adversely affect your loan approval. As far as day to day spending, I advise my clients that they can use their credit cards for normal daily expenditures.
Me: How does a late payment during the process affect their credit?
Lori: Late payments will affect your credit score and ultimately can affect your interest rate and loan approval. You want to make sure all payments are made in a timely manner.
Me: What about transferring funds and preparing for closing?
Lori: Do not close or open any asset accounts and limit the transferring of funds between accounts. We are required to “follow the money” by providing a paper trail on all non-payrolled deposits over a certain amount. It can become frustrating for the client to document the movement of money from different accounts so we like to advise them in advance. Also, there are different requirements for funds that are derived from a gift and/or the sale of personal property so it is always best to speak with your loan officer before making any large deposits.
Me: So you’ve told me things to “NOT” do during the loan application, what can my clients do to make their loan process smooth?
Lori: Great question! They can provide all loan documents in a timely manner. Lenders normally follow the rule of 2’s – 2 years W2’s, 2 current pay stubs, 2 months bank statements. Be prepared to provide all pages of all documentsand do not alter the documents. When we say unaltered, we mean don’t black out, use white out or cross through account numbers or addresses or names. Let your loan officer know if anything changes with your employment/income such as a raise or hours worked per week. Communication is critical.
Me: Sometimes other documents are requested after the loan application is taken, do you have a time frame they should be provided to you?
Lori: We work under the day 1 mentality in that we request that you have all documentation available for us at application. This allows us to do the “heavy lifting” while the client can sit back, relax and pack. In the rare occasion that we do have to request additional documentation, we request that you provide them within a day or two.
Me: Anything else you can think of?
Lori: I think the key is communication. I have learned that you can never over-communicate in this business. Obviously some of the responsibility falls on my shoulders to make sure my clients have realistic expectations and if expectations are set and the client keeps me in the loop of any potential changes – we will have a very smooth and successful transaction.
Me: Great advice! Thanks for spending time with me today and I’m sure our buyer clients will be happy as well. Now how about that lunch ….. let’s go!
Lori: One last thing I wanted to share – for our super busy clientele that have limited time for a phone conversation – we are very high tech! You can start the loan process by completing your loan application on your phone – which allows me to be prepared when I call you back. The app has a mortgage calculator, a link to search for all active properties for sale and provides an easy secure way to upload your documents.
Kim: Can’t forget about the app! Now let’s go to lunch! I’m starving!