Advice to First-Time Home Buyers in Getting a Mortgage: Bare it All
If Ben Bernanke, previous Chairman of the Federal Reserve System (FRS), could not get a mortgage, he might be not naked enough to show the lender that he does not have anything to hide. Maybe, there are keloids or scars hidden in the very private parts of his finances. But this is just my speculation.
Ben Bernanke’s mortgage denial seemed incredulous being the past top honcho responsible for the nations’ monetary policy. I would be nervous if he still is the Chairman because how could we trust him to oversee the financial institutions if he could not manage his own finances.
However, this is not about Bernanke’s dilemma albeit possible relative connection with why some individuals could not get a mortgage.
There are cases when buyers do get pre-approved based on the information they provided to their loan officers and then eventually get turned down along the mortgage process.
Just recently, my buyer was pre-qualified. But when she provided her paystubs, her initial statement regarding her income she gave to her loan officer and the number on the paystub would not reconcile. There was a huge discrepancy between the hours she worked every week per her declaration and the hours on the stub.
The false statement affected her debt-to-income ratio adversely. She said she works 40 hours every week when in fact, the total hours is only 30. Ten hours if summed up for the total year could easily bump the buyer out of the pre-qualification criteria.
She was so excited when she got pre-qualified. Her excitement transformed into what should have been an avoidable disappointment.
If you are unsure of your hours because your schedule is irregular, then you should be upfront with it.
It is not hard to say “I am not an employee working a regular 40 hours a week.”
You can’t leave an essential or minute detail out.
Moreover, if you are a buyer who has business on the side as another source of income, you should tell the loan officer during the initial conversation.
There is no room for window dressing or embellishment in mortgage application. You should bare it all.
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