Are Preapprovals Still Relevant When Buying a Home?
Q & A with Dottie Herman Question: Are pre-approvals and pre-qualifications still as important for the purchase process as they were a few years ago?
ANSWER: Yes, pre-approval and pre-qualifications are generally just as important as they were a few years ago. They may be considered even more important in today's market. There are new regulations that went into place in 2015 and it is generally very important for a new prospective buyer to have a pre-approval or pre-qualification upfront before they submit an offer on a new property. Question: My wife and I want to re-finance. Is a perfect credit score needed when re-financing? Will it negatively affect our rate if one of us doesn't have a score in the 700's?
ANSWER: It is not required to have a near perfect credit score to re-finance, however, there are minimum credit score requirements for every lender. If a customer has a score below 700 then it can have an effect on the interest rate and ability to qualify for the re-finance loan. It is important for the customer to be pre-approved or pre-qualified upfront to set the proper expectations to secure their financing goals. Question: There are some home renovations we wish/need to do. One of the bathrooms leaking causing mold, etc. We saved up for the renovation, but since the mold has come into play it is a much more involved job then we anticipated. Can we get a credit line to pay the contractor? We do not have the liquid cash to pay him for these services. If so, how do we begin the process?
ANSWER: Yes, we can generally offer a home equity line of credit (HELOC) for a customer to complete renovations in their home. The ability to qualify will be based upon the customer's credit and also the available equity in the home. There are limitations on the total amount of the HELOC, which will depend upon the value of the home and the existing 1st mortgage. The 1st mortgage plus the HELOC will need to make sense based upon the value of the home. The customer can contact us to start the initial application to be pre-approved or pre-qualified upfront. The appraisal will be an important determining factor in the amount of the HELOC we can provide. Question: What is the difference if you file bankruptcy personally or for your business? How do they affect your future of financing? Is one worse to file than the other?
ANSWER: For a personal bankruptcy, it will need to be at least 5 years after discharge to be able to apply for a mortgage loan. For a business bankruptcy, it will depend upon the customer's percentage of ownership. If the customer is more than a 25% owner of the business and it shows on the customer's personal credit report, then it will require the same discharge period of 5 years. Question: I am very interested in become a loan officer. What is the process? Are there are courses or certifications necessary? I would like to begin asap.
ANSWER: A new loan officer will need to complete a finger print process and obtain a valid NMLS banking ID number. There will be required course-work involved for any bank,bank; however, if the person applies with a Federallyfederally chartered bank such as Citizens Bank, they will not be required to obtain an individual state license. If the new loan officer applied with a smaller lending institution that is not Federallyfederally chartered, they will need to be licensed in each individual state that they would like to conduct business in.