In the past if you had a credit score of 700 or better you qualified for 100% financing. Countrywide in their hay day (Bank of America bailed them out) had a mortgage program called “Fast & Easy”, which was literally just that. A letter from your employer (VOE), in lieu of tax returns and a letter from your bank (VOD), in lieu of Bank statements. So just imagine the loophole that left open to the collapse of the housing market. Anyone could and did complete these letters with what they deemed necessary to qualify for a mortgage. The two most important documents that stand in second place to your credit history. The VOD shows your ability to have saved and put a down-payment and closing costs into the transaction and the VOE shows your ability to qualify for a mortgage. Your credit history shows your responsibility in paying your bills in a timely manner.
So now we have gone from the old “Fast & Easy” to what I now call “Slow & Treacherous” Instead of that letter from your employer which we still need. We also require your last two years tax returns and most recent 30 days of pay stubs. Then when we get all of that we then contact the IRS and get a transcript (4506-T) to confirm the accuracy of it all. This leaves no room for error. Similarly it’s also done with your Bank accounts, Driver’s License, Passport, Appraisal, Title Report, Contract of Sale, etc.
The word on the street that Banks are not lending is totally untrue. What they are doing is triple proofing every document that they get. So yes, the paper reduction act has gone out the window, but it works.
Unfortunately In The Process A Number Of Things Happen:
· The Borrower gets tired of constantly being asked for additional paperwork.
· The Underwriter at the Bank gets tired of waiting for it.
· The delay in the borrower getting it to the underwriter causes documents to become expired and updates requested.
· The Borrower goes, but I already gave that to you.
· The Seller panics and does not grant an extension in the contract.
· Everyone involved from the Buyer, Seller, the Underwriter, Realtor, Title Agent, Attorney etc. gets tired and in many cases the deal falls apart.
The Following May help A Borrower Understand More:
· Bank statements are good for 30 days
· Pay stubs are good for 30 days
· An Appraisal is good for 120 days
· Credit report is good for 90 days
· Most Contracts of Sale are good for 45 days
Why Use A Mortgage Broker & Not The Bank Direct:
· Firstly we do not charge the Borrower any fees such as Application, Processing, Points, Broker or Origination etc.
· In the past the Borrower paid us. However that’s no longer the case, now the Lender pays us. We can match the costs involved Dollar for Dollar.
· We deal with the Lenders on a wholesale basis and do the complete application from A to Z.
· We know right from the onset what the Lender wants and as the old saying goes; we dot the I’s and cross the T’s. So when the Underwriter gets it, it’s a complete package right from the beginning.
· We know the Underwriters and they know us, as a result the human factor is very prevalent.
Why Now & Not Wait:
The Housing Market is in a very positive upward swing. This time last year 100% of our business were People Refinancing. The same time frame this year 41.7% are purchase and the rest are Refinances. Homes and Interest Rates are almost half of what they were five years ago, so go for it.
For any additional information, or questions regarding other subject matter, contact Sean O’Sullivan at Arlington Financial. Phone: 914-793-1122, email: Info@ArlingtonFinancial.com
Moving to Ireland
After living in Ireland for almost one year, this is what I’ve learned