Now and Later
Some loan officers, rookie ones, will take any and all loan applications they can, package them up and ship it off to their underwriter to essentially see if there’s any possible chance the loan can be approved. This really happens. When a potential borrower applies for a mortgage loan, a loan officer can smile, take the loan application and say things like, “Don’t worry” and “Everything looks great!” without having any clue whether the loan will close or not close. Questionable borrowers who aren’t sure if they can get a loan approval appreciate hearing such positive phrases. These loan officers say “yes” upfront just to get the deal in the door and say “no” later over the phone or email.
An experienced loan officer knows when to say “not now.”
For example, a couple applies for a mortgage loan and their debt ratios are a tad high. They can qualify for a lower loan amount but need to save more money for a down payment first. An experienced loan officer will provide that couple with a path to home ownership. An inexperienced loan officer will take the loan application, the sales contract and document the file for underwriting, simply hoping that the loan will be approved somehow, somewhere.
If you don’t have a professional relationship with an experienced loan officer, it’s time you made one. Loan officers who have been in the business for an extended period of time and have an established following got that way by knowing when to say “not now” to a potential buyer.
Mortgage loans today are primarily underwritten to conventional guidelines from Fannie Mae or Freddie Mac and government-backed loans using FHA or VA programs. That means lenders underwrite loans to the very same standards and when a buyer is declined because their debt to income ratios are way above limits, going to another lender won’t help.
Sometimes the truth hurts. But in the long run the truth actually helps, both now and later.