Once upon a time a young father decided to apply for a mortgage so he could buy a home for his wife and baby. He provided all of the necessary documentation to get pre-approved and after a quick review, the loan officer (yours truly) gave the young father an approval.
Excited about the possibilities of what lay ahead, the young father contacted his real estate agent to go look for homes. They searched far and wide (literally) and finally found a home that worked for the young family that was in their price range. They wrote an offer and it got accepted and they were on their way to closing on their first home.
Until…
The young father was furloughed from his job with Union Pacific Railroad. This is not uncommon during slower times and since he was lower on the totem pole relative to his seniority, he was one of the unlucky ones. He called his loan officer (me) with the bad news and was informed that he would no longer qualify to purchase the home they had found – no surprise to him.
After about five months he was called back to work. He found out that many employees who had seniority over him who had also been furloughed quit which moved him up the ladder and made it less likely that this would happen again. The young father contacted me to see how long it would take before he could get approved and was informed (by me) that it would probably take 7-9 months, give or take, before he could qualify since his average monthly income needed to be high enough to service his debt ratio.
Tick Tock
Over the months of working to get his average income level back to where it needed to be, the loan officer (me) contacted the young father on a regular basis to see how he was doing and make sure that he was on track (no pun intended on the railroad reference). After a little over seven months the young father began to get anxious and wanted to see if a different lender might be able to get him approved to buy a home sooner than the original lender (me). The first lender he spoke with denied the loan altogether saying that he didn’t qualify for anything. Frustrated, he called another lender who said he could approve him to buy a home that cost $100,000 – there was really nothing at all this cheap. Finally, he contacted the original loan officer (me) about eight months after being furloughed and asked to see what I could approve him for. He provided all of his updated documentation (most recent pay stubs and bank statements) and I pulled a new credit report and I told him that I was able to approve him for $170,000 – he was excited because he knew he could find the right home for his family in that price range.
With the approval in hand, the young father went back out with his Realtor and after looking at several homes, they found another home that was just right. They made and offer and it got accepted. This time, there was no furlough and everything went smoothly. The young father and his family closed on their home and are living there happily ever after.
The Moral of the Story
The lender you use makes a difference. A lender who understands the guidelines, how to properly calculate income and highlight the positives of a file so that the underwriter feels good about approving it is key to the success of many loans. When that same loan officer can also provide strategies to help clients create wealth and prepare for retirement, that’s a winning combo. Contact me and put my experience and expertise to work for you.
