Often, the loan application process is the most disliked during a real estate transaction. Suddenly, after falling in love with your new home, you’re hit with a seemingly insurmountable stack of legal documents that come with warning, known as the loan application.
But not to worry! If you don’t have a preferred loan officer, I have several excellent loan officers that I have worked closely with over the years who can sit with you to make sure your every question is answered. They will make sure you fill out the application properly and with understanding. For someone who has been employed at the same job for several years, the standard documents are needed at loan application, such as: last two month’s bank statements, last two year’s IRS filed tax forms, W-2’s, etc.
For self-employed buyers, especially those who have relocated to another market, the requirements may mean more documentation. Remember, when it’s Other People’s Money (OPM), it’s Other People’s Rules (OPR). Though you may not like the requirements, unless you are buying with cash, there is no way around meeting the requirements of the lender.
However, there are limits. A recent loan officer I worked with asked for what I thought was an unnecessary document from the buyer. My first comment was to put the messenger, the loan officer, at ease, “I understand; when it’s other people’s money it’s other people’s rules.” Next, I asked, ‘Is this a routine request?’ The loan officer said no.
Aha! I thought to myself. Pause… With this, the loan officer said, ‘Let me see if I can get the investor to rescind the request.’ It was rescinded.
Once, at the final walk through new construction, a buyer client was told by the builder’s sales agent that the in-house loan company was requiring the diagnosis of a disabled child to finalize the loan package. The client lost it. She shouted it’s nobody’s business what the condition of my child is. She swore that rather than disclose, the request itself being a violation of the HIPAA Law, she would pack up and move back to her home state. To say that things were falling apart was an understatement.
From my perspective, I could see the sales agent and my client at an impasse. The loan could not proceed without that information, we were told, and my client was not going to divulge the condition.
It was clear to me that for the purpose of the loan, the lender wanted assurance that the condition was permanent, since the income listed on the application included that child’s benefits. I suggested that the client request her child’s doctor provide a letter to the lender stating that the condition was permanent for the purpose of the income stated.
She said, ‘Oh, OK.’ The builder rep agreed that would probably work, and in seconds, we were back on track. Never underestimate that extra pair of eyes and ears a wise buyer agent brings to the transaction. Sometimes it takes outside-the-box, unemotionally involved quick thinking to overcome what looks like a deal breaking objection.