OOPS…Didn’t See That One Coming
Here is a list of common “trips” which can make Pre-Qualifications a little risky:
- Unreimbursed expenses, most notably (but not limited to) car mileage (“my accountant said it was a good idea”)
- Self employed with multiple businesses (no matter how “passive” the business is)
- Losses from secondary businesses (the part-time AmWay rep co-borrower)
- Recent unsourced or non-employment deposits (the loan brother Bob finally paid back after several years which you are using for down payment)
- Income structure changes (“my company turned me from a W2 employee to a 1099 employee after 5 years even though I am doing the same job for them”)
- Gaps in employment (“it was only 60 days”)
- Joint credit obligations (“I thought my ex-husband was paying that account”)
Good loan officers will ask the right questions and determine which process is best for you, but since in many cases, you have no idea of the skill or experience of the person you may be talking to about Pre-Qualification or Pre-Approval, my desire to arm you with the information to know which one is best for your success. When in doubt…never be afraid to ask your loan officer and go over your situation. Also, always be up front and honest about your circumstances. Gone are the days where lenders will not find out about any financial skeletons. Your loan officer is working to help navigate you thru the right process and the ultimately the right mortgage. Full disclosure is critical to his or her ability to provide that service. Rule number 1 for any great loan officer…always put your borrowers in the best possible position to succeed with their purchase transaction and ultimately in homeownership!
