Playing "Catch Up"? The Impact of Late or Missed Payments


Playing "Catch Up"?
The Impact of Late or Missed Payments


Everyone's familiar with the term "catch up", right?  You've probably heard it used hundreds of times ...


As a kid, you probably used it yourself with friends when you said ... "You go ahead, I'll catch up".


As an adult, it's likely you've said, "I'm playing "catch up" at work" after returning from a long weekend or vacation.  Or upon meeting an old friend, asking them to give you a call so you can "catch up" with each other. 

So "catch up" is typically seen as a good thing ...  

It has a positive connotation.  It denotes affirmative action will be taken or wrongs will be righted.

But there is one place where "catch up" is not viewed as favorably or is viewed with more skepticism.  And that's with credit and repayment of debts ...

Credit bureaus ... creditors ... and mortgage underwriters ... view "catch up" with a much more critical eye.  In their eyes, missed and "catch up" payments raise doubts and concerns about an applicant's repayment abilities.  In turn, they ask that those doubts and concerns are adequately addresssed.

As of late, I've had a rash of mortgage inquiries where the mortgage candidate has mentioned they are playing "catch up" on payments they've missed ...  

The latest involved applicants hoping to convert their present Adjustable Rate Loan into a Fixed Rate Loan.  These homeowners had built equity in their home.  Their income was consistent and sufficient to successfully move forward.  

But ...

As they shared more of their financial information with me, they revealed that within the last year "maybe 1 or 2 mortgage payments" had not been made on time.  Also, their current payment still remained due.  

Uh-oh ...

Upon my asking for more info and background regarding those payments, the applicants questioned me as to why their late mortgage payments would matter?  They had successfully played "catch up" and made the payments.  In their eyes, they were current.  That was the bottom line, right?

Unfortunately, it's not that simple or easy when making application for a new mortgage ...

When navigating today's mortgage application and underwriting process, much rests upon the applicants' credit history and credit scores.  Should they presently hold a mortgage, their mortgage payments must have been made ON TIME, especially during the year leading up to their making their new mortgage application. 

Signs of "catch up" on a credit report can be a problem and stumbling block for a mortgage applicant on the road to a new mortgage approval.  In these cases, "catch up" can be viewed as a real negative.

Now I would never insinuate that efforts to repay credit commitments are wrong.  They're not.

But mortgage applicants must understand:  The consistency, timing, and timeliness of payments matter greatly. 

Mortgage applicants should also know:  Late or missing payments could affect their credit scores and the "approvability" of their new mortgage application.  

Why?

Mortgage Underwriters, during the underwriting portion of the mortgage process, will be assessing the mortgage applicant:

  • Reasons for the credit issues arising
  • If the issues have been resolved
  • If the underlying issues have been solved
  • Were the issues a one-time occurrence caused by health, employment, or other life-changing events?
  • Are the issues of a chronic nature?
  • More ...

In order to proceed to mortgage approval/denial, a thorough explanation (and subsequent proof) regarding those payments will be required by Mortgage Underwriters.  

So it's vitally imperative that any new mortgage applicant having late or missed payments at the time they make new mortgage application remain communicative and fully engaged with their LO.  They need to be completely (and quickly) forthcoming with information and answers to questions regarding their missed/late payments. 

During this crucial time in the mortgage and underwriting process, the Loan Officer will be of great assistance to their client.  The framing of the explanation received takes on grave importance.  Mortgage approval or denial rests upon the information and explanation provided to Underwriters.

Past missteps or laissez-faire attitudes towards credit or mortgage payments can come back to haunt you.  Timely consistent payments are a big deal to Lenders and their Underwriters.  They're an important part of what they're looking for when considering a new mortgage application. 

"Catch-up" just doesn't and won't cut it ...



* Hoping to Buy or Refinance a Condo, Home, or Investment Property in New Lenox, Will County, or elsewhere in the Chicago - Chicagoland area, IL or WI

Contact me!

I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:



Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI Licensed #216987


American Portfolio Mortgage Corp.
NMLS #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281


  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

    


Gene Mundt, Mortgage Originator, a Mortgage Originator with 40+ years of #mortgage experience, that will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of #Chicago, #Cook County, and elsewhere within IL and Wisconsin.

Your Referrals & Testimonials are Always Greatly Appreciated!















  




WHO Are the People That Will Help You Navigate Your Mortgage Process When You Buy a Home?


WHO Are the People That Will Help You
Navigate Your Mortgage Process
When You Buy a Home?


You've decided to become a homeowner ...

Congratulations!

For most people, that means it's time for them  to:

  • Seek and Choose a Mortgage Originator
  • Learn about the steps involved in the mortgage process
  • Educate yourself about the other professionals involved in the mortgage process 
  • Learn what real estate professionals you'll need to assist you as you navigate your journey to successful homeownership
  • Educate yourself as to their roles and responsibilities in the process
  • Take action!


The following infographic will help you accomplish that more smoothly ...

It's a roadmap for the mortgage process.  It will help you easily and successfully navigate the exciting home financing and buying path you're about to begin.  




I and the other professionals mentioned above will work with you every step of your home buying and financing process ...   

Please, don't be afraid to ask us questions should you not fully understand something.  Our goal is to thoroughly explain every step and to help you feel comfortable with the decisions you are about to make.

Should you be buying (refinancing) in New Lenox - Will County - Chicagoland - IL or WI:  Contact me.  I'll be happy to assist you in every way possible.  

Should you be in need of a referral for the other local real estate professionals needed during your process:  I'll be happy to help with that too.  With over 40 years of experience in the mortgage industry, I know the area's best.

Reach out soon.  I look forward to hearing and working with you ... 


* Hoping to Buy or Refinance a Condo or Home in New Lenox, Will County, or elsewhere in the Chicago - Chicagoland area, IL or WI? 

Contact me!

I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:



Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI Licensed #216987

American Portfolio Mortgage Corp.
NMLS #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281



  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

    


Gene Mundt, Mortgage Originator, a Mortgage Originator with 40+ years of #mortgage experience, that will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of #Chicago, #Cook County, and elsewhere within IL and Wisconsin.


Your Referrals & Testimonials are Always Greatly Appreciated!





Are You Pre-Approved or Not? Pre-Approval VS Pre-Qualification



Are You Pre-Approved ... or Not?
Pre-Approval VS Pre-Qualification  


If you take a look online, you can easily find multiple definitions and opinions on just what constitutes a Mortgage "Pre-Qualification", "Pre-Approval", and "Pre-Approval Letter" and the differences between them ...  


So that said, as a Mortgage Originator, when first contacted by a potential Borrower, I must ask (along with other things) what that client knows about the mortgage process as a whole, what they know regarding Pre-Qualifications and Pre-Approvals ... and to ascertain which (Pre-Qualification or Pre-Approval) best fulfills their need(s), both in the short-term and long.  

If trying to find out what financing or home buying options they may or may not have at their disposal ... or just hoping to spruce up their credit standing for future buying  ... Pre-Qualification may fulfill their needs.  But if they're wanting to buy soon, or have an actual home in mind for purchase, most often, Pre-Approval serves their immediate purpose better.

So what are the steps needing to be taken to obtain a Mortgage Pre-Approval and Pre-Approval Letter?

The process to receive a Pre-Approval Letter typically includes the following:
  • A client is hoping to buy or refinance a home
  • That client has contacted an Originator (me) to be qualified for mortgage financing
  • That client hopes to secure a Pre-Approval Letter stating that they are financially qualified to buy/refinance a home and successfully complete the financing process to do so
  • The client provides me info (and hopefully supporting documentation) for the purpose of submitting that info to automated underwriting
  • A Pre-Approval Letter is provided to the client 

I've found that sometimes the terms Mortgage Pre-Qualification and Pre-Approval ... and their definitions ... seem "muddy" or hard to differentiate between by new clients entering t1he home buying and financing process.  Their confusion often surrounds:
  1.  Just how literally can a Pre-Qualification or Pre-Approval/Pre-Approval Letter be taken?  
  2.  What assurances are gained from obtaining each?
Now, to be sure, there's a legal definition for each term.  (See links above) But I find it's the term Pre-Approval/Pre-Approval Letter that garners the most interest from potential Borrowers/Buyers and is increasingly requested by them (versus a Pre-Qualification).  

It's my opinion that Pre-Approvals are the preferred choice and more reliable for Buyer/Borrower's (and Seller's) sake when an actual Real Estate Contract is being negotiated.  That reliability is anchored in the fact that a more thorough scrutiny (and often automated underwriting) conducted by the Lender.  

It must be pointed out though that a Mortgage Lender does protect themselves during this portion of the process, as Pre-Approval Letters do include an "out" or ability for the Lender to withdraw or cancel a Pre-Approval.  The "out" comes into play should any of the discussed terms within the Letter change after more detailed data is learned ... either about the Borrower(s) or the property being proposed for financing.

You'll find some examples of changes or misinterpretations that will null a Lender's Pre-Approval below: 
  • Variances in the Borrower(s) actual length of employment:  Dates regarding when a Borrower worked at a current or former Employer
  • Variables in Borrower(s) pay:  
         A.  HOW they get paid
       B.  Actual number of hours worked
       C.  Actual rate of pay
       D.  Figures regarding Unreimbursed Business Expenses
       E.  Discrepancies surrounding Commission or Bonus
  • Gaps in employment:  Gaps not previously reported and only verified by an Employer's Human Resource Department after the Mortgage Application is taken 
  • Classification of employment:  Learning that a Borrower(s) is Self-Employed or Independent Contractor VS a salaried or hourly-wage employee
  • Funds to Close:  Funds are found to be either in part or full from "cash on hand" with no verifiable means of documenting the source of the funds
  • Large Deposits:  Large Deposits are made into the Borrower(s) accounts for the Closing Funds and Down Payment.  The funds cannot be sourced by traditional income or transfer of other assets from other accounts
  • Property Type:  The Property Type is not reported correctly (Example:  What was reported as a Townhouse is actually Condominium Ownership and not approvable by FHA, Fannie Mae, or VA, as a Condo)
  • Loan Specificity:  A specific loan program intended to fit the criteria of the loan scenario is discontinued or a Borrower(s) income or DTI (debt-to-income ratio) can't meet the specific requirements of that program ... and no other financing options are available 
  • More ...

When any of these instances occur and a Pre-Approval is canceled by the Lender, it's often not received well by client or agent ...  

The basis for the Lender's withdrawal of the Pre-Approval is often viewed as an "excuse".  It's seen as info that should have been obtained, known, or raised as a potential problem by the Originator earlier in the process ... or anticipated because of the Originator's past work experience.  

In some cases, that is correct.  But even experienced Originators cannot know everything and make mistakes.   

While I still have a large number of clients that reach out to me via phone, email, text, and social media ... in a growing number of my files, Borrowers are themselves completing electronic filings for Pre-approval online.  While there can be an advantage for clients, it can have negative results too.

How?  

Sometimes Borrowers misinterpret or answer a question on the online application incorrectly and unknowingly.  In these instances, the obtaining of subsequent digital or paper copies of documentation, credit reports, statements, job histories, etc., later reveal a discrepancy, error, or misunderstanding made.

So it's vitally important for Mortgage Applicants to know:  Documentation subsequently provided to the Lender is where the all-important difference between Pre-Qualification and Pre-Approval resides ...   

As an Originator, I'm lucky ...  

The majority of my mortgage clients come to me as a "warm lead".  That meaning that their agent, attorney, accountant, friend have worked with me in the past and recommended my services.  They're a bit more well-versed and it's been explained that they need a Pre-Approval Letter before they can start their home search.  That gets us off to a positive start.

Still, my clients arrive in varying stages of readiness to buy.  Some are more informed than others and have an idea of what the mortgage process holds for them.  

Others know their credit scores because they performed a search prior to our speaking.  Or they gained their scores via a free monthly credit card service.  They may have a vague idea of what they can afford or a monthly payment they're hoping for.  

But it's rare that valid proof of income is in hand when we first speak or available to me at that time.  Valid proof meaning pay stubs, W-2's, Tax Returns submitted, down payment fund verified by bank statements, retirement account statements, investment funds, proceeds of a sale of property, etc.  (For a complete listing of documentation needed at the time of application, click HERE). 

Such was the case when I spoke to clients late in the day on Saturday this past weekend ...  

We had talked prior to that call, but it had been months.  They were in their car.  They'd been out viewing homes and they'd found one they really liked.  

Their question to me?  How quickly could I provide them with a Pre-Approval Letter so they could place an offer on the home?  Their agent was demanding it.

Time was of the essence for these Buyers and they did receive a Letter ... but it was a Pre-Qualification Letter, as it was provided without any income or asset verification to support our initial discussions.  It's not the scenario I recommend to my clients or agents.

This is just one of the many scenarios an Originator can face when receiving requests for Pre-Qualifications and Pre-Approvals.  There are always many moving parts to each request and varying timetables to negotiate.   

While there is no 100% foolproof guarantee that a Pre-Approval will turn into a Loan Commitment and Cleared to Close ... Pre-Approvals remain the closest thing to being so.  It's a wise Borrower that communicates with their Originator early, consistently, and thoroughly and allows their Mortgage Originator ample time to conduct the process needed to provide one.


There is so much to gain by taking early proactive steps ... certainly credit and financial-wise.  But also in reduced stress. 

So get started on your Pre-Approval early.  Contact me immediately upon making your decision to buy.  Don't wait until you're ready to view homes.  

You'll be glad you made the decision and the effort ...




* Hoping to Buy or Refinance a Condo or Home in New Lenox, Will County, or elsewhere in the Chicago - Chicagoland area, IL or WI? 

Contact me!

I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:



Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI Licensed #216987

American Portfolio Mortgage Corp.
NMLS #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281


  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender   

    


Gene Mundt, Mortgage Originator, a Mortgage Originator with 40+ years of #mortgage experience, that will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of #Chicago, #Cook County, and elsewhere within IL and Wisconsin.


Your Referrals & Testimonials are Always Greatly Appreciated!



  







   














  






2018 - Lincoln-Way Community High School Varsity Football Schedules (Central, East, & West)


2018 - Lincoln-Way Community High School
Varsity Football Schedules
(Central, East, & West)



Kids are back in school already ...

That means some great gridiron action is available each week at your local high schools ...

Lincoln-Way Community High School, District #210, serving the New LenoxFrankfortMokena, and Manhattan communities, provides plenty of great opportunities to watch top-notch football by our area's talented players.

Consisting of 3 schools and campuses, Lincoln-Way Community High School, District #210 is offering a full 2018 schedule of exciting football games and superb half-time entertainment for area residents' and visitors' enjoyment.

Below you'll find the 2018 Varsity Football Schedules associated with each of the Lincoln-Way High Schools and their varsity football team ...


           2018 Central Knights Football Schedule



2018 West Warriors Football Schedule


2018 East Griffins Football Schedule


   





Remember:  Lincoln-Way Community High School, District #210 football games can be heard on WJOL 1340 AM throughout the entire 2018 football season. 

I'm a proud LWHS alumnus ... 

I hope that you take the opportunity to attend many Lincoln-Way High School, District #210 events and support its students, teachers, athletes ... and musicians ... this Fall and throughout the entire year.

Best of luck to all the Lincoln-Way Community High School, District #210 athletes, students, musicians, coaches, directors, teachers, and parents ...


 
 *  
 If you're hoping to buy or refinance a home in the Lincoln-Way Community High School, District 210 ... in Will County, or elsewhere in greater Chicagoland - IL - WI, please contact me. I'll put my 40+ years of experience hard to work on your behalf.
I'm easily found at:
     
Gene Mundt

Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed


American Portfolio Mortgage Corp.
nmls #175656


Direct: 815.524.2280
Cell or Text: 708.921.6331
eFax: 815.524.2281

 Get Started Today!
 

  Twitter Account of Gene Mundt, Mortgage Originator   LinkedIn Account of Gene Mundt, Mortgage Originator   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Originator   
            Gene's Chicagoland Blog/Gene Mundt, Mortgage Originator 

Gene Mundt, Mortgage Originator, an Originator with 
40+ years of mortgage experience, will offer you exemplary 
mortgage service and advice when seeking: 
 Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago 
and the greater Chicagoland region, including: 
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, 
Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, 
Naperville, etc.), DuPage County, the City of Chicago, 
Cook County, and elsewhere within IL & WI.

Referrals are Appreciated and Welcomed!

Playing "Catch Up"? The Impact of Late or Missed Payments

Playing "Catch Up"? The Impact of Late or Missed Payments Everyone's familiar with the term "catch up", righ...