Buying A Home
The decision buying a home must initially be made by the individual(s) who worked hard, put aside enough money and will commit to maintaining and taking care of that home as long as they occupy it. But seldom does the home buyer possess all information needed to complete the home purchase from start to finish without input from third party individuals, including friends, family, or others unrelated to that home buyer, some of whom are real estate and mortgage professionals that must eventually be consulted.
Although the first time home buyer will often get advice from well-meaning friends and neighbors, the information they provide can seldom be relied upon to simplify the overall process. On the other hand interaction with a real estate agent, mortgage broker, real estate attorney or mortgage lender will result in the new home buyer getting a better perspective of what s/he can expect, and what s/he is expected to do during the home buying process.
The mortgage lenders will often receive a home buyer’s request for mortgage financing after that buyer has already consulted with the real estate agent, a mortgage broker (in some cases), and a real estate attorney (in some states and jurisdictions); and it is during this mortgage application process that the mortgage lender or bank has the best opportunity to evaluate the home buyer and reach a decision pertaining to the basis on which this buyer decided to pursue home ownership.
Mortgage lenders, like any other real estate professional, want to do business and capture as much of the market as they can, provided that the lending policies they employ are based on prudent and sound principles; and their practices are in accordance with federal state and local laws, rules and regulations. So despite the desire to do more business the mortgage lender must often temper that desire with the restrictions which are inherent in the business of mortgage lending.
If a mortgage lender’s critique of home buyers could be put into words it would be in form of the lender’s request for documentation and information deemed necessary to make each buyer into the strongest and most durable borrower s/he can possibly be, since the lender is often held responsible for that mortgage loan long after proceeds are disbursed at a title closing.
Most mortgage lenders know within the first week to ten days of receiving a mortgage application whether or not the home buyer/borrower is a viable risk; but it’s not the clear-cut “qualified” or “unqualified” home buyer that occupies the bulk of a mortgage lender’s time and causes him/her to lose sleep at night. It is those “gray area” buyer-borrowers that at first glance appear to be qualified, but their approval cannot be supported due to a lack of documentation, insufficient assets, credit blemish(es), inconsistency of employment, borderline debt ratios, or a number of other factors, thereby requiring the use of compensating factors to strengthen the loan and bring it into conformity with applicable underwriting guidelines.
Mortgage lenders are often forced to wear many hats in the course of a typical day at the office and, as such, can act as adviser or critic when the occasion arises. So in the case of one of the above group of first time home buyers that might merit a lender’s advice and critique, it would most likely be the “gray area” borrowers that lenders advise against purchasing right away, based on constructive criticism of certain existing inefficiencies which can be remedied only with time. This, despite the insistence of this very group that their time to own a home has come. Most lenders would beg to differ.