Prequalifying for a mortgage doesn’t have to be as complicated as it may seem!
It’s important to make sure that all of your documentation is being reviewed before you get an official green light from your lender. With the market as competitive as it is recently, it’s been a common practice for listing agents to get what is called a cross-qualification to confirm the buyer is eligible for financing. I recently was reviewing a borrowers file and noticed that the tax returns weren’t included. He stated that his original lender never asked for them. When the original lender called me, he went on and on about the company that he was associated with and how he has been doing lending for the past 20 years when I had questioned why he had chosen to omit the returns with the approval. He continued to explain how he didn’t need them because the borrower made so much money.
My thoughts are this: CPA’s are there to help their clients think of crafty ways to save money on taxes. Oftentimes, there are write offs on a client’s tax return that must be used against their income. If those expenses, which can be a number of items, aren’t taken into consideration up front, and the buyer gets an accepted offer, it can be devastating to all involved if a buyer realizes that their trusted lending partner didn’t do their job properly.
Let that be a lesson to all reading this. If your loan officer doesn’t request a copy of your tax returns, and only your W-2’s and pay stubs, note this as a red flag and ask them why they aren’t doing a thorough job of qualifying you. It can be very costly in the end to cut corners at the beginning. Let me know if you have any further questions! Maureen Martin – Your Lender for Life