What It Takes to Get a Mortgage Today

Presented by:Mortgage Network, Inc.Lorimer “Skip” Trafton

District Manager, NMLS# 509662

Being “Penny Wise and a Pound Foolish”!Passing on having a building inspectionOffensive offers

Incurring new debtChanging jobs/careersNot getting Pre-Approval for a loan amount before going

shoppingBeing honest and upfront with the lenderTaking care of credit issues ahead of time

Trying to “Max-Out”

Common Mistakes Potential Buyers Make

Extra counseling time taken with “first-time” homebuyers.

5 Components of achieving homeownership:Job/Income StabilityCreditAvailable assets and optionsPersonal qualification factorsProperty qualification factors

Preparing The Borrower

Preparing the Borrower

DO’S

Do contact us as soon as possible to get pre-approved before starting your home search. Do save all bank statements, paystubs, retirement statements, tax returns and W2s. Do keep making payments on time and stay current on existing accounts.

Do use your credit as you normally would. Do notify your lender if anything changes. Do let your employer know you are buying a home for simplicity when the lender needs to verify employment.

DONT’S

Don’t make changes to your employment or income and inform us immediately if anything does change.. Don’t max out or over charge existing credit cards, and don’t close credit card accounts. Don’t make any adjustments or transfers to your investments.. Don’t close accounts, consolidate or pay off any balances, collections or charge offs unless communicated by your Loan Officer. Don’t make large deposits into your accounts without documenting the source.

Don’t overdraw on your bank account or bounce a check.

Required Documentation2012 & 2011 W2’s – Include all jobs for the previous 2 years2012 & 2011 1040’s – Provide all schedules and pages & sign Page 2.

(State Returns are not required)Last 4 Pay Stubs – Employer’s business name and address & Borrower

name, address and identification information must be present.Last 2 Month Bank Statements – All pages front and back, E-Statements

acceptable, History printouts unacceptable.Sales contract – Executed by all partiesReal Estate Listing SheetReal Estate Deposit Check – Provide cancelled check and corresponding

bank statement evidencing funds clearing the bank account.Borrower specific documentation, i.e. Divorce decree, Bankruptcy

paperwork, Self-employed returns, etc.

Preparing the Borrower

Walk borrowers through the loan processPre-ApprovalHouse ShoppingMake offerOffer acceptedApplicationAppraisal/Title work orderedUnderwriting/ApprovalCondition follow-upClosing

Preparing the Borrower

Communication, Communication, CommunicationGood news/bad newsWeekly updates (minimum)All parties; borrowers, listing and selling brokers,

processing/underwriting team and title attorney

Best Practices

Some programs require Homebuyer EducationKnowledge is a Reality Check

Expenses post-closing; i.e., water and sewer, real estate taxes, maintenance, budgeting for heating, etc., etc.

Benefits; i.e. tax advantages

Importance of Homebuyer Education

Program designed for the consideration of borrowers who have experienced an adverse “Economic Event” (Pre-Foreclosure sale, Deed-in-lieu or Foreclosure) and can document:Certain credit impairments were the result of a loss of employment, or a

significant loss of employment, or a significant loss of household income beyond the borrower’s control.

The borrower has demonstrated full recovery from the event.

The borrower has completed housing counseling.

FHA’s Back To Work Extenuating Circumstances Program

Eligibility Requirements:Borrower’s credit history is clear of late housing or installment debt

payments and major derogatory credit issues on revolving accounts.

Any open mortgage is current and shows 12 months satisfactory payment history.

12 months have elapsed since date of foreclosure, deed-in-lieu, or short sale.

12 months have elapsed since discharge of Chapter 7 Chapter 13 Bankruptcy was discharged prior to loan application and all required bankruptcy payments were made on time for a minimum of 12 months.

FHA’s Back To Work Extenuating Circumstances Program

Housing CounselingMinimum of 1 hour one-on-one counseling from HUD

approved housing agencies.

Be completed a minimum of 30 days but no more than 6 months prior to submitting a loan application.

List of agencies can be obtained online at http://www.hud.gov/

FHA’s Back To Work Extenuating Circumstances Program

For more information on buying a home, please call me

Lorimer “Skip” TraftonDistrict Manager, NMLS# 509662

Cell: 207-653-6909ltrafton@mortgagenetwork.com

www.SkipTraftonLoans.com

Mortgage Network, Inc.2059 Congress Street│ Portland, ME 04102

Happy House Hunting!

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