How Does A Loan Consultant Do Their Job? ESTABLISHING THE FINANCIAL BASELINE. Part 1.
ESTABLISHING YOUR FINANICAL BASELINE:
I can hardly blame people (clients, potential clients, realtor, family, friends, etc) for not understanding what a loan consultant or loan officer does.
A basic summary: I look at a person or persons ability to qualify for a loan to purchase a home. Based on the three things that hold up a loan: (1) Income (2) Assets or net worth (3) Credit. This loan is typically going to be upwards of $100,000+.
As often said, buying a home is a most one of the largest purchases, any one person will make in their lives. No matter which way you look at it, buying a home is a big ticket item. Unless you have the cash to buy the home outright, there is a good likelihood you will have to finance the purchase. There are some people that do have the money to buy a home in cash, but choose to finance it anyways. This is called leveraging. That’s another blog for another day.
When digging in a little deeper however, there is a lot of misunderstands or lack understanding of how we are mortgage consultants do our job.
Mortgage consultants are the first line of qualification screening. We review the 3 legs of a home loan. Income, assets, & credit. I call this, establishing the financial baseline. The baseline that I build your qualifications on.
I get a lot of clients who do not want to go through this initial step. I don’t know if laziness or they want the easy answer. Simply saying, “ I just want to know how much I qualify for” or “I just want to know what the rates are”. This is not something I can spit ball or shoot from the hip. The answer to those questions are going to be based on your personal finances and individual financial position.
You wouldn’t go to a restaurant and ask the chef to make you the most amazing meal you have ever had in your life, without giving more information. The chef will need to ask you some questions. Questions like; preferences, dislikes, allergies, etc. Then he/she will customize the meal for you specifically.
To answer the questions of how much you qualify for and what is the rate, I want to know: “What is your monthly income? What is your credit score and in addition to your credit score, what are your monthly debt obligations? How much do you have saved for the home buying process and your general net worth, this includes any funds left over after buying the home. It could help strengthen your qualification to show reserves. IF you have money after buying the home, you are in a much more secure position in the event something happens to you, your family or job. Keep in mind, it is not always a requirement.
This is all done by completing the home loan application. By completing this application, you are telling me the story of your finances. You can find my hyperlink on my webpage or text #loanofficerlinda to 51614.
The application, however, is not your whole story. Your whole story also includes your goals, timeline to buy, where your comfort level is on payments and many other factors. There are a lot of mortgage companies that are trying to streamline the process with online technology. Often times, taking out the human touch needed in this complex and emotional process. Once the application is completed, I will always schedule a in person consultation or phone call to go over your information to truly understand what your goals are.
This is a crucial step. Because no one makes or spends the same as the next person, each and everyone’s financial position & home buying goals are unique. Maybe you can qualify for a much higher house payment, but you are not comfortable paying that much. Then I would not pre-approve for that purchase price or monthly payment.
After the home loan application is complete, I will review the information you provided. In understanding a little bit of your story, I will have a better idea of what type of documents I will need to request from you. The more information I have in front of me, the more accurate my assessment.
