When I (Luke) first got into the mortgage business over 6 years ago, the world was a very different place.  The government and financial institutions were operating under the idea that everyone in America should own a home.

The first company I worked for specialized in Stated Income Stated Asset mortgages.  While this sounds risky, these loans were only given to people with a great credit score and credit history and a verifiable income source.

The next company I worked for specialized in subprime loans.  These were loans designed for people with less that stellar credit and these types of loans were designed to be a short term fix.  In fact, many people who received these loans would have lost their home at that time, if it were not for these subprime loans.

The idea was that real estate was always a safe investment for banks because property values always went up. If the borrower defaults (went into foreclosure) the lender would get the property back and be able to sell it to get most of their money back.  But nobody really thought about what would happen if too many homes went into foreclosure and property values started to drop.  Well, as we all know, that worst case scenario did happen and as a result, getting a new mortgage in today’s market can be very difficult.  This month’s article is going to give you some tips about how to make getting a new mortgage as painless as possible.

The first and most important thing to remember in today’s mortgage/real estate market is that YOU MUST DOCUMENT YOUR INCOME! There are no more stated income loans.  For self-employed borrowers such as myself, this can often pose a problem.  The best advice I can give to all of you self-employed people is to have a professional mortgage broker review your file to see if you can document enough income to qualify.

The second tip that can make getting a mortgage go much quicker is to Collect All Your Documents Ahead of Time.  Here is a short list of documents that are required on most loans today: 2 years tax returns including W-2s, 30 days of Paystubs for all jobs, 2 months of banks statement for all bank accounts (including retirement accounts), Copy of drivers license and social security card.  These are just to start.  Your mortgage broker professional could have a list of additional items for you to collect.  It is very important to get the requested documents back to your mortgage broker ASAP.

The final tip that I would like to give you about getting a new mortgage is Have Patience.  The mortgage process is not longer a streamlined process.  Lenders are all asking for more and more documentation.  As long as you are working with a Professional Mortgage Broker, they will guide you as quickly and painlessly as they can through the mortgage process.

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