Mortgage Lending 101
March 7, 2017 | Justin Thomas
The Thomas Group at Keller Williams Louisville East works closely with a number of local mortgage professionals. We tend to recommend direct lenders over banks and brokers for the simple fact that direct lenders have more options and more control over the lending process. Think about it this way:

A BANK offers its customers a wide variety of services. A home mortgage is only one of many different options that banks have to offer, whereas a mortgage lender only lends money to home buyers. That’s all they do all day, every day. Mortgage lenders don’t offer other services that could muddy the waters.

A MORTGAGE BROKER does not deal directly with an in-house lending department, so they have to fit your specific situation into a box that someone else designed. They may work with 10 or 15 different lenders in order to find a box for your loan to fit. While this seems like a good way to find the best deal possible, consider this:

DIRECT LENDERS that can also broker wholesale loans have the best of both worlds. Most of the time they are dealing with their own internal lending department, hence the term “direct lender”. Loan officers and processors can speak directly with the underwriters and oftentimes they can be more flexible when it comes to that box that you have to fit in. At the same time, if your situation is completely unique, and they feel that you cannot get the best deal through them directly, they can broker it out to someone who can create the best loan for you. That’s a win-win.

ONCE YOU’VE SELECTED A LENDER for your home purchase, you will need to gather a number of income documents and other items that pertain to your specific ability to pay back the home loan. Here’s a good list of documents that you may need to present to your loan officer at your first meeting for pre-qualification. The following will apply to each person that will be on the loan:

  • W-2s for the last two years
  • Tax Returns (all pages) for the last two years
  • Pay Stubs for the last 30 days
  • Bank Statements for the last 60 days pertaining to all accounts you will be using for this transaction
  • Your driver’s license and social security card
The following items are necessary for special circumstances:
  • A copy of the recorded divorce decree and property settlement statement
  • Any and all paperwork pertaining to bankruptcy, including discharge letter
  • If you own 25% or more of a business, you will need business tax returns for the last two years
THIS MAY SEEM LIKE A LOT of paperwork, but keep in mind that someone is about to loan you a lot of money to buy a home, and they have to do their due diligence. Also know these things:
  • The lender will be monitoring your credit and your bank accounts from the time your offer gets accepted on your new home through the day of closing. They will be looking to see if anything out of the ordinary happens, so it’s advised that you:
    • DO NOT make any large cash deposits or withdrawals without speaking to your loan officer first
    • DO NOT move money around between different accounts without speaking to your loan officer first
    • DO NOT apply for new credit cards
    • DO NOT buy a car, truck, van, or boat
    • DO NOT finance your new furniture or appliances
    • DO NOT change jobs or quit your job
  • The lender will also need you to send a new pay stub every time you receive a paycheck throughout the process.
  • It’s very important to respond to your loan officer as quickly as possible.
  • It’s very important to provide items requested by your loan officer as quickly as possible. The lending process is tedious, and small setbacks can turn into huge delays quickly.
This is just a glimpse of what it takes to make it to the closing table, but that’s why we are here. Our job is to make buying a home in Louisville a seamless experience. Between The Thomas Group at Keller Williams Louisville East and your mortgage lender, we will keep you on track and headed in the right direction so that you can focus on preparing to move.
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