Today is the buyer’s commitment date… but the lender has not issued one, in fact they are declining the loan!!!
That’s because the buyer does not qualify for the purchase which is what we told him when he came to us for the loan. He is self-employed and we suggested that he come back once his most recent year of tax returns was completed because his income would be higher. The buyer decided that he didn’t like the news and went to another lender where he was given a pre-approval letter, he then made an offer to buy a property, spent money on the inspection and the appraisal and guess what… the buyer does not qualify and will not be approved.
How does a consumer differentiate between information provided by two presumably professional lenders? How does a buyer determine who is telling the truth?
Here are some steps to take for your own education and protection:
• Have the lender walk you through exactly how they arrived at the approved loan amount for your financial profile.
• Ask for details on all aspects, credit, income, savings and employment history – get the why.
• Use the information gained with the first lender when interviewing for a second opinion “Why can you do this when the other lender said that it could not be done?” Then carefully consider the answer, you can take that answer back to the first lender if you think that will help you gain clarity.
• In light of differing opinion, get a third.
Regulators are trying to create a mortgage system where the consumer cannot get hurt, but that is simply not possible. All industries have good and bad players and various levels of competency of professionals. No amount of regulation is going to change that. Consumers have to be smart, educated and shop responsibly. Not just for the lowest rate or the answer they want to hear but for competency and knowledge in the marketplace.