8 Mortgage Questions You’re Hesitant To Ask Your Lender
Lenders have heard it all. You’re not the first person to have sensitive mortgage questions you don’t want to ask, and you won’t be the last. Sharing your finances and personal life with someone you just met can feel scary and intrusive. Many borrowers feel hesitant when giving a lender access to their entire lives. A solid financial relationship is built mainly on emotional trust. Finding a loan officer you feel is trustworthy who answers all of your questions without judgment can empower you to accept the help you need to buy the house you want. Below are the answers to 8 mortgage questions you’re hesitant to ask your lender.
8 Mortgage Questions You’re Hesitant To Ask Your Lender
1. Can I Get A Loan Without A Job?
Verifying your income and employment is a large part of getting prequalified and approved for a home loan. Your lender will assess your debt-to-income ratio, credit history, taxes, bank statements, etc.
It’s essential to be as honest as possible when turning over all documents because if you don’t, you won’t get approved, and your lender will find it out anyway. You’ll end up having to explain why you weren’t forthcoming with the information. Your loan officer is there to do this deep dive to give you the best options to get you what you want.
Sellers desire solid and serious buyers. This is why acquiring prequalification is the most critical step in the home buying process. Of course, just because a mortgage applicant doesn’t have a job doesn’t mean they won’t repay the mortgage. You can still purchase a home when unemployed or refinance, though additional challenges exist. Lenders want to see proof of income to know that you’re able to repay the loan. So as long as you have income of some sort, it can be used to get you approved. Types of incomes can be child support, social security or disability payments, payments from financial portfolios, etc. But the only way to know if your income sources will be sufficient enough to secure a loan is to go through the preapproval process.
2. How Do I Remove An Ex From My Mortgage After Getting Divorced?
Selling and dividing the profits is the best way to resolve the issue of homeownership after divorce. You have two main options for removing someone from a mortgage: one, sell your house, or two, one spouse can buy the other out. If one partner wants to keep the house, you’ll need to agree on a buyout figure. The buyout total should reflect the home’s appraised value. The spouse staying in the home may decide to refinance to pay the buyout. Fannie Mae allows a partner to borrow up to 95 percent of their home’s appraised value during a buyout. Buying back a house in this way will remove the ex from the title on the house.
3. Does My Husband/Wife Need To Be On The Loan?
A spouse as a co-borrower can help to improve your odds of qualifying for a loan. However, you may desire to keep your partner off the loan if they have a poor credit score, a ton of debt that could hurt you or for personal reasons. It’s not a requirement for both spouses to apply for a mortgage. The non-borrowing partner might still need to get a credit check throughout the mortgage process, but the spouse responsible for the mortgage becomes the sole name listed on the home’s deed and the only person who is legally responsible for payments. If you need to add a spouse or partner to your mortgage in the future that can happen using a quitclaim deed.
You’ll need to contact your lender with the request, and they’ll do the necessary paperwork to know if they will decline or accept the mortgage modification. Another way you can add someone to your current mortgage is through refinancing.
4. What Happens To My Mortgage If I File For Bankruptcy?
When one considers filing for bankruptcy, their first concern is usually keeping their home. If you file for Chapter 7 bankruptcy you may risk losing your home. However, if you’re a homeowner filing Chapter 13 bankruptcy, you may be permitted to stay in your house and continue paying your mortgage. Your loan officer is always there to help. They will often find ways to work with you to modify or reaffirm your loan so that you can continue living in your current residence.
5. Can I Get Approved For A Loan If I Owe Back Child Support?
Arrears are past-due or unpaid support. Child support arrears often show negative marks on your credit and can factor into your mortgage prequalification. If your back child support has reached collections or the judgment phase, you may be at a greater risk. Avoiding relaying this information to your loan officer and hoping that the arrears don’t appear on your credit report may sabotage your chances of getting approved.
Talk openly with your loan officer and discuss how you plan to pay down the debt to improve your odds of loan eligibility. Your lender may request proof of payment or a court-approved repayment plan. Another option would be to pay the debt in full to ease the burden on your credit.
6. Is It Possible To Get Approved If I Owe Back Property Taxes?
Property taxes fund county and municipal services. If unable to pay your property tax bill, your local tax office will typically begin charging monthly interest. You can also be charged penalties for overdue payments. If you continue not to pay your taxes, a tax lien will be placed on your property, saying you can’t sell your home unless the tax bill is paid off. If you’ve received a tax notice, contact your loan officer and a tax attorney as soon as possible. Failure to pay your property taxes is considered an “event of default,” which puts you at risk of foreclosure, even if you’re making your monthly mortgage payments. Relief options that may be available are:
- Late payments
- Establishing a payment plan
- Requesting a tax deferral
- Take out a property tax loan to pay the debt in monthly installments
7. Why Does The Lender Need To Know Where The Money Deposited In My Account Comes From?
Large deposits that don’t come from your regular earnings will require some explanation. Suppose you can’t prove through documentation that the source of a big deposit is acceptable under the program guidelines. Your lender will need to verify significant deposits to ensure they came from an acceptable source. Confirming a large deposit is another way for an underwriter to determine if you’ve taken out a new line of credit or even another loan that could potentially affect your debt-to-income ratio and the loan amount you can afford.
Large or irregular bank deposits may indicate that your required reserves, down payment, or closing costs were acquired from an unacceptable source. A large deposit may also indicate an illegal gift. If a buyer accepts help from a party who stands to gain anything from the transaction — such as the home seller or real estate agent, this is unacceptable. The lender must disregard the funds and use whatever is left to qualify you for the loan. If the verified funds aren’t enough to prepare you for a loan, you’ll need to save another chunk of cash — from an acceptable source.
8. What If I Can’t Make My Mortgage Payments?
There are several options available if you can no longer afford your mortgage. Contact your loan officer first. They’ll help you better understand your financial situation and offer solutions that can help. Your loan officer will ask for more information about your financial hardships, like why you can no longer make your payment and whether the circumstances are permanent or temporary. Your mortgage company will want to help you keep your home as much as you do. They will likely offer you options like refinancing, a repayment plan, mortgage assistance, loan modification, or forbearance. If none of these options work, you may find yourself entering into the short-sale of your home to avoid extreme actions, like foreclosure or bankruptcy.
Living Houston Works With Amazing Lenders
Having uncomfortable questions is entirely normal, and you should feel safe asking your loan officer for answers. If you’re unsure where to begin or who to trust, Living Houston works with a few select lenders who are some of the best in the industry. We would be more than happy to refer you to these experienced professionals. Contact Living Houston for more information.