I don’t know everything, but because I have logged probably thousands of hours working with underwriters I can safely say I know more about their requirements to approve a home mortgage loan than the average borrower. And it is pretty rare that a borrower decides they should challenge that expertise.
But I found it very interesting when a recent client decided to roll the dice based on his level of expertise when trying to buy a property — for which he needed financing!
And here’s my case in point: I was putting together a loan application for this client who was an entrepreneur. From the giddy-up, a client who doesn’t receive an annual W2 needs to provide real honest detail about their income and the source of any funds they bring to the transaction.
This gentleman, however, was adamant that the source of his $150,000 down payment was basically nobody’s business. Furthermore, the documentation that he finally did present didn’t jive with the monies he had and therefore really didn’t jive with the underwriters. They bounced it, just like I told him they would.
To cut to the chase here: we wasted a ton of time, the deal is now in jeopardy (because contracts are ticking time bombs if not diffused with the information that your friendly Tampa Bay Mortgage Broker asks for); and we are looking at a whole bunch of unhappy people: the Realtors that worked so hard to put the deal together, the seller of the property, and all the other industry professionals who only get paid if there is a closing.
At the end of the day….mortgage lenders are not trying to pry dirty little secrets to share about their clients at the company Christmas party; it is only full disclosure that shows the underwriter you have nothing to hide and are a risk worth taking – you’ve gotta go the Full Monty or the deal’s off.