A complaint that consumers have regarding today's mortgage loan origination process is all the hoops they have to jump through in order to get a loan.
The first question is did the loan officer prepare their clients for all that they needed to have or do in order to get an approval? Personally, I don't know; I do know people are complaining about all of the "last minute" conditions they are being required to fulfill to get their loan through the process.
In a recent press release, LendingTree chairman and chief executive Doug Lebda spelled out what he feels consumers need to do when they first apply in order to get approved for a loan.
"Since mortgage lending is such a highly-regulated industry, lenders are tightly boxed-in with 'yes' or 'no' decisions for funding a mortgage. Specifically, the debt-to-income ratio, loan-to-value ratio and credit score. But there are a few guidelines homeowners can follow to increase their chances of being approved for the loan and for snagging the most desirable rate:
"Have at least two years income documentation on hand, including pay stubs and W-2 forms. Research comparable home sales in your area to get a good idea of your home's value. Know your credit score before entering the loan process.
"Avoid taking on new debt before or during the home loan process as this can increase your credit score and act as a red flag to lenders. Try to maintain a steady employment history and avoid changing jobs right before or during the mortgage process," Lebda said.
These are all some common sense basics loan originators should be sharing with their clients. The next question is "are you?"
