?Self-Employed
How to Secure a Successful Mortgage Approval
The current mortgage transaction bears only a small resemblance to the transaction that used to take place, even those transactions of just a couple of years ago.
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Changes have taken place within the mortgage industry and process that address and accommodate current market conditions and demands. And those "steps" certainly take place at a much faster tempo.I like to think of it this way ...
The process used to be a caveman. It's become a "bot". The process has evolved into a more detailed, sophisticated, swift, and advanced procedure.
For an applicant that is self-employed, those "details" I elude to can seem like a tall mountain to climb. Their fear or hesitancy of climbing it may actually keep them from buying a home, talking to a lender, or applying for a mortgage.
That's not a positive outcome, so what can be done to address their concerns?
First: Self-employeds (or other applicants), must understand that it isn't predetermined that the mortgage process be scary or overwhelming for them.
When the process is broken down into easily understood more digestible bites, the mountain becomes less steep. The steps in the process are more simply tackled and successfully completed.
My 4 decades of experience in mortgages have taught me:
Actions and measures taken proactively in preparation for mortgage application make a measurable difference in how easily the mortgage process is navigated by an applicant. That is especially true when the applicant is self-employed.
My experience also taught me that any self-employed worker considering a home purchase (or refinance) is best served by one easily performed action:
My 4 decades of experience in mortgages have taught me:
Actions and measures taken proactively in preparation for mortgage application make a measurable difference in how easily the mortgage process is navigated by an applicant. That is especially true when the applicant is self-employed.
My experience also taught me that any self-employed worker considering a home purchase (or refinance) is best served by one easily performed action:
Talking with a mortgage lender early and well in
advance of starting their home search
This one initial step allows for important discussions and actions to take place with your loan officer.
What actions and discussions?
- A preliminary credit check can be performed
- Guidance and advice for credit repair/credit improvement can be provided by the loan officer
- A "positioning" and preparation for the mortgage application can be conducted by the applicant and their loan officer.
- Credit and application can be maximized to their maximum potential
After these simple proactive steps are performed and a real estate contract is secured for a home, what should then take place next in the mortgage process?
The following should occur:
- A Mortgage Application should be taken within 5 days after contract acceptance
- Documents should be discussed during the Application appointment. Those documents are: The Mortgage Application itself, the Good Faith Estimate, the Truth-in-Lending, and supporting disclosures (about 40 documents)
- The Application Fee/Appraisal Fee should be collected
A. Income
B. Employment
C. Assets
D. Identification
E. Credit (if not already obtained) or update
F. Other relevant explanations (known as Letter of Explanation (LOX)
G. Bank Deposit History, etc.
Note: Other discussions between Loan Officer and Borrower will take place at this time, as well.
Those discussions can surround:
A. Escrow/No Escrow (Escrow required above 80% LTV)
B. Lock Rate (or float?)
C. Term of Mortgage Loan (30 year, 15 year, etc.)
D. Cash needed for Closing
E. Total Monthly Payment
F. Homeowners Insurance Policy Requirements/Proof of Insurance/payment
Remember this important equation:
Well-prepared Self-employed Borrowers =
A Smoother Mortgage Process/Faster Loan Approval
When this occurs and Underwriters have received all the info and documentation required, Underwriters can then make well-informed decisions to Approve, Suspend, or Deny a Loan Application ... and do so in a logical and timely manner.
What is an Underwriter's decision based upon?
With more lead time and ample direction from a loan officer, the applicant's "story" is more easily, fluidly, and successfully compiled and submitted.
The likelihood of receiving mortgage approval becomes much higher. The applicant's timeframe and goals for home purchase (or refinance) are more easily achieved.
Simply put, taking this one important step can deflate much of the fear and apprehension felt by a self-employed applicant.
Are you hoping to Construct, Buy, Refinance or Purchase a home or investment property in Chicagoland or somewhere else in Illinois or Wisconsin?
Looking for mortgage financing answers, options, solutions, and experienced assistance?
Contact me! I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
Looking for mortgage financing answers, options, solutions, and experienced assistance?
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 License #216987
American Portfolio Mortgage Corp
NMLS #175656
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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, Frankfort Square, Joliet, Shorewood, Elwood, Lockport, Wilmington, Crest Hill, Symerton, Braidwood, Channahon, University Park, Beecher, Plainfield, Bolingbrook, Romeoville, Tinley Park, Homer Glen, Crete, Peotone, Naperville, etc.), DuPage County, Kane County, Grundy County, the City of Chicago,
Cook County, and elsewhere within IL & WI.
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