In our extensive experience working with clients and lenders, we’ve noticed that many clients have been surprised to learn certain aspects regarding the loan process— which is why we wanted to discuss them here with you. HomeUnion Lending’s VP Chris Diaz notes the three aspects clients are most surprised to learn about when it comes to procuring a home loan for themselves in today’s conservative lending environment:
“There’s a significant amount of disclosure required of potential homebuyers, in order for their application to get approved; and unfortunately (thanks to the events that took place in the industry a few years back) there’s no getting around them. So it’s best to be prepared, by knowing exactly what they are.” Diaz continues his thoughts…
In today’s tightly regulated mortgage industry, closing a loan can take a significant amount of time; so make the process a smooth one by having all your information in order and ready to go. This means being able to produce documents regarding your:
- Income (ie., paystubs, W-2s, and possibly tax returns)
- Assets (ie., bank statements or investment account statements)
- Liabilities (ie., properties owned, student loans, and car payments)
The Qualified Mortgage Rules require lenders to make what’s called a “good faith determination” (based on the information above, as well as other factors) regarding your ability to repay the proposed loan. If the answer is “yes,” the process then shifts to the underwriter, who puts your ability to repay (ATR) under additional scrutiny. Underwriters determine approval based on eight main factors (which can be found in online consumer finance sources).
3) Docusigning Your Documents:
While I (correctly) noted the substantial amount of work and attention to detail required to meet the current requirements for a home loan, there’s also some good news. Many of the forms— with the exception of the final loan documents— can now be Docusigned. This silver lining ensures that you’ll no longer have to print and sign a mountain of documents by hand— which saves so much time. It’s fair to say that modern advancements are definitely changing the lending process… for the better.
Meet the Expert
Chris Diaz currently serves as Vice President of HomeUnion Lending, a wholly owned subsidiary of HomeUnion Inc. His team is committed to helping investors obtain financing for their real estate investment plans.