In 2014, we interviewed mortgage expert, Jeremy Owens of Ameris Bank. As the housing market changes, so does the loan process. Check out the updates to Jermey's answers below.
What’s the most important thing a buyer can do in preparation for getting a mortgage?
With the advent of free credit reports, everyone should be reviewing a credit report at least annually for inaccurate information. A buyer should review their credit report in the 6-12 months prior to beginning their home search. I suggest you contact a preferred mortgage lender to begin a basic pre-application. Free credit reports are a great tool however; they are not substitutes for a full “Residential Mortgage Credit Report.” There are many types of credit scoring methods and each returns a different score. CreditKarma happens to be my personal favorite provider of free credit reports and they say the following. “Like a thumbprint, no credit score model is exactly the same. Each credit score model has a slightly different formula for weighing credit score factors. The credit bureau can use dozens of different credit score models based on the requirements of different lenders. As an example, a mortgage lender may use a different scoring model than an auto lender because they each place importance on different factors”.. A seasoned mortgage lender should be able to review the credit report and make suggestions and give advice on what you should be focusing on to keep your credit in good standing or improve your credit when necessary.
What can a homebuyer expect from the mortgage application process?
The mortgage application process can be intimidating. I have personally been through the mortgage process numerous time and it still makes me nervous. Securing mortgage approval and satisfying underwriting conditions is NOT the hard part of the application process. The government has imposed strict oversight and regulations on mortgage lenders. We are now required to document, document, and over document each application. If you are prepared to say “Yes” every time a new document is requested, your application will be easy. I suggest you prepare to save copies of paystubs, W2s, and tax returns into an electronic folder for easy access.
What should a homebuyer look for in a mortgage lender?
Your mortgage lender should be a competent professional, well versed in PURCHASE mortgage applications. Your mortgage lender should also have a local presence in the community you are considering joining. A local lender is better equipped to help move your application through the multiple back room layers of underwriters, processors, and closers. There are no end to horror stories from homebuyers that chose lenders with out of state operations or internet lenders offering “too good to be true deals” only to end up being rescued by a local lender. I personally save numerous loans every year that are turned down by the national banks and large online lenders. You should also consider the opinion of the real estate agent you have hired to represent you. Your real estate agent’s goal is to make sure you are happy and find your dream home. They want to ensure your mortgage financing is handled by a professional who knows how to bring your mortgage to completion.
Are lending restrictions starting to ease up? If so, why?
Lending restrictions are beginning to ease up slowly as investors are realizing the quality of today’s mortgage is very high. New programs are being pushed out by the national mortgage regulators with a focus on first-time homebuyers. Down payment assistance is very popular and in some cases very easy to obtain.