Amy's Ebook

Buying a Home and Need a
Mortgage?

Then you must read this!

By Amy Tierce

Vice President

About the Author

For Amy Tierce, Regional Vice President of Wintrust Mortgage, it was passion that led her to
where she is today. Her success all began with music. Amy had a love for music and a flair for
creative marketing which landed her a job at WBCN Radio in Boston. Today, more than three
decades later, Amy is one of the most sought after mortgage lenders in the area. The jump from
music to mortgages may seem unusual, but not for Amy. As a young girl, Amy felt that she
could convey to other people the benefits of whatever she was passionate about and as such she’s
a natural entrepreneur, whether it's marketing music or mortgages.

After meeting her musician husband Emitt in the early 1980’s, the couple decided to start a life
together. Today they have two sons. Kyle is a writer and musician who's exploring
environmental sciences, and Nolan, who has Down's syndrome, aspires to be an actor. With a
young family at home, Amy decided to leave the music industry and explore a career change.
She went from sales in fashion to real estate sales and from there landed in Mortgage lending.

Since starting in the industry in 1990, Amy has found a way to make music in the mortgage
business. She is a passionate rain maker with high standards for customer service delivery in an
ever more complicated mortgage process. She takes great pride in educating her clients and cares
deeply about getting it right – and doing it better – all the time. A voracious reader and student of
the real estate/financial industries, Amy is always one to share her knowledge and expertise,
writing a weekly, industry-directed newsletter, frequently speaking to audiences of all sizes in
the mortgage and real estate industries and regularly contributing to both local and national
publications.

For nine years Amy led the #1 branch and served as the New England regional manager to 8
branches for Fairway Independent Mortgage. She and Operations Manager, Deana Auman-
Kirbach, started with Fairway in her spare bedroom.

Amy brings her extensive mortgage knowledge and experience to this new opportunity with
Wintrust Mortgage, headquartered in Rosemont, IL. When she is not working, writing or
reading she is enjoying time at home with her husband of 33 years and her silly dogs Hank and
Chester.

Contents

Mortgage Minutia Series

Mortgage Minutia #1: The Credit Report and Trade lines.
Mortgage Minutia #2: There is more to a credit report than a credit score!
Mortgage Minutia #3: Wait, we are not done with credit yet!
Mortgage Minutia #4: There is no rounding on the application ALL has to be exact…
Mortgage Minutia #5: More on the “Ten ‘o Three” or the mortgage application
Mortgage Minutia #6: We still haven’t finished the application, but we’re almost done!
Mortgage Minutia #7: On to the transaction!
Mortgage Minutia #8: Now let’s see if you qualify… it’s not as simple as dividing your income by
12!
Mortgage Minutia #9: Self Employed?
Mortgage Minutia #10: “Other Income” this is not minutia any longer!
Mortgage Minutia #11: Assets — Savings accounts, checking accounts, retirement funds,
investment accounts…
Mortgage Minutia #12: Time to Look at Property
Mortgage Minutia #13: Condominiums & Multi-Family Properties
Mortgage Minutia #14: Underwriting- Your Loan Application is Approved!!

Borrowers don’t believe me when I tell them about how painstaking the mortgage process is
compared to 5 or 6 years ago. As a result, I launched the Mortgage Minutia series where I walk
through the mortgage process step by step and illustrate the pitfalls associated with each stage.

This compilation will provide you with a complete road map that will help you navigate the
process and offer consumers a list of questions to ask in order to determine if their lender is
steering them along the correct path.

As I have said in the past it all begins with the credit!

Mortgage Minutia #1– the Credit Report and Trade lines.

Last week I had two calls from borrowers whose mortgage applications had been declined (of
course after they had been pre-approved).

In fact, both of the calls that came in last week were from buyers who did not have enough active
credit to be approved in the programs they applied for. This was true at their pre-approval
process but was missed by the lender. They had their offer accepted, paid for an inspection and
an appraisal, but were ultimately declined for their financing.

When evaluating a credit report a lender looks at far more than the credit score.

 Trade Lines: each item of credit on a credit report is called a trade line. Many programs
have active trade line requirements. You may have 10 pages of credit but only one active
trade line.

o To be active you must have used the credit regularly with in the past 12 – 24
months.

o Just having an open account with zero activity does not help.
o Some programs have requirements as to the type of credit you must have.

 Many first-time buyer programs, loans requiring mortgage insurance and jumbo mortgage
programs have minimum active trade line requirements; generally they want to see three.

 A trade line requirement can be easy to miss at pre-approval, either because the loan officer
doesn’t catch it, or you has pages of credit and they didn’t look to see how much of the credit
was active.

First question first-time buyers, low down payment buyers and jumbo borrowers should be
sure to ask your lender:

“Do I have enough active trade lines for the program you are presenting to me?

Mortgage Minutia #2 – There is more to a credit report than a credit score!

We learned that the number and sometimes the type of trade lines (individual credit records) is
part of the credit evaluation for mortgage lending.

We are not done with credit yet, as there are many credit items that will require a lender to
conduct further examination before an approval can be issued and many items that require time
to investigate or repair. Today we are looking at:

Disputed Accounts and Credit Inquiries.

Disputed Accounts:

 When you formally question an account with a creditor or make a claim with a
creditor or are in dispute over a credit issue, the account in question is put into
“dispute” on your credit report. This means that the account is removed from the
credit scoring models until the issue is resolved. However, mortgage lenders want
accounts taken out of ‘disputed’ status so that the credit scores are accurate.
Getting an account out of dispute status can take several weeks.

 If at pre-approval a borrower has disputed accounts the lender needs to do a
thorough review and determine if the loan can be done as is, or if further action is
required. A pre-approval credit review has to include a review of any disputed
accounts.

 Frequently we see minor claims and we recommend that the consumer simply pay
them just to move on and avoid credit complications later on.

Credit Inquiries:

 A credit report will also show any time another creditor has accessed the credit of
the consumer. This is called an inquiry and a consumer is required to inform the
lender if any new debt has occurred as a result of the inquiry. The lenders need to
know this to accurately determine the debt ratios of you.

 Inquiries become more important at the end of the process where all lenders are
required to conduct a ‘credit refresh’. This report does not re-pull the credit report
but shows the lender any credit activity that has occurred since the first credit
report was pulled. Any inquires will have to be addressed at that time and if the
inquiry resulted in new debt, the loan may have to go back to underwriting for re-
approval. Additionally, if you has had a late payment or any other credit issue,
the underwriter may have to review again. Since a credit refresh is required to be
pulled at the very end of the process any new credit issues could jeopardize the
closing.

Consumers should not make any moves that could impact their credit during the house hunting
process including applying for a store credit card to buying a new car without first talking with
their lender.

Ask to see a consumer copy of your credit report to make sure the data reported is accurate, ask
about disputed accounts and if you have any, do you need to resolve them now.

Mortgage Minutia #3 – Wait, we are not done with credit yet!

After reading just three segments of the Mortgage Minutia Minute you should start to understand
why speedy approvals in mortgage transactions can create huge challenges. It appears that the
regulators and credit risk officers want to see a consumer go through a full credit cycle during
the mortgage process so that they can get an accurate look at how the consumer utilizes credit.

More credit items that can complicate a mortgage application:

Liens or public records, authorized users on credit cards – yours or theirs, co-signed debts, and
undisclosed debt.

Liens and Public Records:

 Claims against you from an outside source, for example, the federal or local tax
authority can be addressed by placing a lien against a borrower who has
outstanding debt. So can a contractor. Any outstanding liens will need to be
resolved and discharged for lending purposes.

Authorized Users:

 If a borrower is authorized to use another person’s credit card, that debt will show
up. The account does not count towards the trade line requirements but the debt
will count towards you. It is easy to call and have an authorized user removed
from the account if the debt ratios are out of range.

Co-Signed Accounts:

 When you co-sign on a credit application for a friend or family member that debt
becomes your debt and is counted towards your overall debt ratio. We need to
collect 12 months of cancelled checks from the paying debtor to prove that the co-
signer is not responsible for making the monthly payments if we need to remove
the payment from the ratio calculation

Undisclosed Debt:

 You should always get a copy of your credit report from the lender to confirm that
all the data is correct and that all debt is properly reported. There are creditors
who do not report to the credit agencies. Undisclosed debt is a HUGE fraud buzz
word. Just because the debt does not appear does not mean it can be ignored.
Most likely it will be found later in the process when a ‘fraud guard’ report is
pulled or when evaluating the tax returns. Best approach is complete honesty and
transparency so that a transaction is not at risk later on.

You need to consider all activities that impact your credit and be open and honest with your loan
officer to insure that nothing comes up late in the process that hurts the deal. You should also be
cautious before co-signing debt. If not paid properly, the negative credit becomes the co-signers
as well and can negatively impact the credit scores.

You apply for an auto loan and in minutes are approved and soon driving a new car off the lot, or
a person can show their driver’s license and provide a social security number and have credit at a
department store in seconds.

As you know the mortgage approval process is not as fast and easy and it is easy for you to take
the industry need for detail for granted.

Mortgage Minutia #4 – There is no rounding on the application ALL has to be
exact…

The completion of the mortgage application, referred in the industry as the 1003 (ten ‘o three) is
an exacting science. Many lenders have borrowers complete applications online, however, it’s
easy to be casual when you fill out this form.

For example, you are required to demonstrate a full 2 year residential and employment history.
That is a full 24 months. If you are not exacting and the loan officer is not double checking that
every data field has been completed as required, problems can arise.

 If the application is completed stating that you have been on your job for two
years and a verification of employment comes back that you have been on the job
for one year and 11 months we will have to go back to you, determine the
previous employment and obtain documentation verifying the previous
employment even for just one month.

 Some programs require 12 months of cancelled rent checks to verify timely
payment. If you indicate that you have been in a property for 12 months we need
12 checks to that landlord for that address, if you have rounded the number we
will have to re-do the 1003, and re-verify the rent for just one month’s difference.

We had a borrower complete an on line application stating that they had been at one
address for two years, when they actually had been at 8 addresses in two years. I

understand why they didn’t take the time to complete the application correctly, but in the
end we had all 8 addresses documented on that 1003 as required by guidelines.

Everything has to be exact; number and ages of children, real estate owned must be completed
even if there is no mortgage on the property, the ‘declaration questions’ have to be answered
truthfully or they can come back to bite you and hurt the transaction.

Utilizing technology is a great way to start the process but a thorough interview is necessary to
insure the proper completion of the application paperwork.

Tip: Do the best you can with the details for the loan application; be concerned if the loan
officer does not require an additional interview and review of the information to insure
completeness.

Mortgage Minutiae #5 - More on the “Ten ‘o Three” or the mortgage application

With data integrity being a dominant theme in the mortgage industry, all details on the mortgage
application have to be correct and exact. We discussed that you cannot round up your numbers,
such as time of employment or years at current residence.

Here are a few other examples of how “right and right” the mortgage application data has to be:

 Dependents: The application asks if you have, and the number of dependents. Often this
question is overlooked. However, the lender is required to pull tax transcripts directly
from the IRS as a fraud detection measure, and if there are dependents listed on the
returns they must appear on the application. Omitting this information will require the
lender to correct the application, may require a letter of explanation from you and could
delay a commitment or a closing.

 Phone Numbers: Must be correct and exact, if you have a home phone number, that
number must be on the mortgage application (versus a cell phone number) and the
employment phone number should be the main line versus your direct line.

 Addresses: Again, all data must match, from the application to the appraisal to the
closing documents and if it doesn’t, all will have to be addressed. We are required to use
the property address as determined by the United States Postal Service. We have had
issues where the number sign (#) has been in place instead of “unit” in the address
description.

Your current address must also be correct. The lender needs to know if your tax returns
were filed from a different address, because the IRS will not release the transcripts if the
request does not have an address that matches the actual tax returns.

Also, if you utilize a PO Box, the actual address must also be stated on the application.

 Additional Properties: Borrowers have a tendency to omit other real estate owned if
there is no mortgage on that property. It will be found out on a “fraud guard” report or the
tax transcripts, so do not omit anything.

The bottom line is that this is an exacting process with multiple stop-checks built in. A consumer
cannot hide anything, intentionally or not, and the process of correcting omissions or sloppiness
can cost multiple days on the mortgage timeline. Lesson learned — get it right and tight from the
very beginning in order to have a smooth process that closes on time with no surprises.

Mortgage Minutiae #6 - We still haven’t finished the application, but we’re almost
done!

The last two sections of the mortgage application (fondly known as the 1003) can be easily
overlooked or completed carelessly.

The Declaration Section

It’s vitally important that the questions below be answered truthfully. In today’s internet age, a
lot of information can be discovered about each applicant, and answering a question incorrectly
creates the impression that you is trying to hide something.

Some answers to these declaration questions could require additional documentation for you, or
even another review from underwriting. It’s important that the loan officer asks each of these
questions during every application interview, so that there are no surprises during the process.
It’s also important that you answer all questions truthfully so that they’re not viewed as
potentially committing fraud.

Government Monitoring Section

Borrowers want to know why we request this information; the collection of this data on all
mortgage applications provides the government with their lending statistics for fair lending
purposes. This is how they know if we’re properly fairly lending to all without discrimination.

Mortgage Minutiae #7 – on to the transaction!

We’ve completed the mortgage application with great attention to detail, and all of our addresses,
years at work, phone numbers and other details are correct and accurate. No we begin to
document the application package.

Let’s start with the Purchase and Sales Agreement!

We don’t need a signed P&S for you to apply for your mortgage. However, many buyers don’t
want to start the full application process until they’re comfortable that the transaction will hold
together.

Although we can order an appraisal and provide the signed offer in order to get things rolling,
lenders are required to provide a copy of the signed P&S agreement to the appraiser before
they’ll release the appraisal report. Therefore, it’s important to the timing of the transaction to be
sure you get the P&S signed as stipulated. If this process is delayed, it could delay the mortgage
commitment.

The names of the applicants for the mortgage should match the names of the buyers for the
property as stipulated on the P&S, meaning that if the mortgage is only in one name, and the
P&S lists two people, we may be required to have the P&S changed. Sometimes, we may change
the application in process and remove a borrower for some reason, in which case we’re required
to amend the P&S. This isn’t true in all cases but understand that it can be a lending requirement.

It’s important that we review all purchase contracts for the following:

 Seller Concessions
 Personal Property
 Required Repairs
 Septic Determination

All of the above can have an impact on the loan. If you know that you’re going to have any of
the above, talk to the lender prior to signing the P&S to ensure that all is compliant with lending
guidelines.

Mortgage Minutiae #8 - Now let’s see if you qualify… it’s not as simple as dividing your
income by 12!

We’re taking a slow journey through the mortgage process, and we’ve come to the point of documenting
your income. Like many other mortgage processes, this one has become more complicated and exacting.

We’re required to obtain transcripts directly from the IRS on every transaction to verify that the income
used for you is the income reported to the government. This can create some complications later on if
we’re not through in obtaining all income-related documentation.

W2 – Salaried Employees

Required: Most recent W2 and pay stubs reflecting a 30 day period.

The first thing that we look for is whether or not the pay stubs accurately reflect the income stated on the
mortgage application. The loan officer needs to determine if the consumer is paid weekly, monthly, bi-
weekly or bi-monthly. Weekly, you have 52 paychecks, monthly 12, bi-monthly 24, and bi-weekly 26.
Missing one of those distinctions can really mess up your income calculations!

We ask for two years of W2s to ensure that we don’t miss anything important to the calculations. In
addition, we also ask you to provide your most recent federal tax returns.

Why the over-documentation?
Consumers can take a tax deduction for “unreimbursed business expenses”. This is a common practice,
however those deductions also have to be deducted from your income. If we don’t collect the tax return
up front, we could find out later in the transaction, when we receive the tax transcripts, that you don’t
qualify! The same situation can occur if you have a small business or other financial transactions which
show a loss on their tax returns.

Forewarned is fore-armed — so better to get more information right away and avoid nasty surprises later.

Other variables to consider when qualifying a W2 employee:

Part time – must have a two year history of working part time job(s)
Hourly – must have two years of income to average if variable
Overtime – must average over two years
Bonus – review two years, if increasing average, if declining use lowest figure
Commission – same as bonus, if increasing average two years, if declining use latest year only

Mortgage Minutiae #9 – Self Employed?

Many people believe that you can’t qualify for a mortgage if you’re self-employed. This isn’t
true — if we can document enough income for you to qualify for the loan amount that you’re
looking for, then the self-employed can get financing just like everyone else, but you’ll have to
provide even more documentation.

Qualifying the Self-Employed Borrower

Schedule C

Required: Two years of federal tax returns (some lenders may request a year-to-date Profit &
Loss)

For the schedule C borrower, we’ll look at two years of returns. If the income is declining we
take the most recent year only; if the income is rising we average both years. There are some
deductions which we are allowed to add back into the income.

All potential buyers with Schedule C income should consult early with a mortgage advisor since
they can review their income in advance of filing their taxes and may have an opportunity to
improve their income if they choose to.

Incorporated
S Corp/C Corp
Partnership
LLC

Required: Two years of federal personal returns, and two years of federal business tax returns.
Some lenders may require a Profit & Loss, business credit report and/or a balance sheet.
Once again we’ll average income if consistent or rising, or qualify using the most recent tax
return if income is declining.
A new “ability to repay” regulation is in effect and ratios are getting tighter along with
underwriting scrutiny, which makes it even more important that you get fully and thoroughly
pre-approved.

Mortgage Minutia #10 – “Other Income” this is not minutia any longer!

Rules exist regarding what is now a “Qualified Mortgage” or QM and how lenders document
“Ability to Repay” or ATR.
I am not sure what I have been doing for my entire mortgage career if not verifying a borrower’s
ability to repay their mortgage but that is another conversation.

Under these new rules greater scrutiny will be paid to all self-employed borrowers as we have
discussed in past posts. There is another category of income that is neither salaried nor self-
employed. It is called “un-earned” income.

Un-earned Income comes from the following sources:

· Alimony/Child Support

· Retirement/Pension

· Social Security

· Disability

· Capital Gains

· Rental income

· Dividend and interest

(There are a few other esoteric un-earned income categories that we rarely see and are very
uncommon).

Under the ATR regulations a key provision is verifying the likelihood of the continuation of all
income, and un-earned income can be the most challenging to verify. We must be able to verify
that the income stream will continue for 3 years from the closing date.

This can be extremely tricky especially for Child Support but certainly with all of the un-earned
income areas illustrated above.

This is why you need to start with the pre-approval process early to determine that all income
can be property verified and supported so that there are no concerns when the mortgage
application goes into underwriting.

Mortgage Minutiae #11 - Assets — Savings accounts, checking accounts, retirement
funds, investment accounts…

We’re required to analyze bank statements to determine that the consumer is actually able to
make the down payment represented in their offer. Even this simple task is complicated by
regulations, and todays more complicated consumer profiles and lifestyles.

Here’s a list of items that we look for and at when evaluating down payment ability, overall
financial management and reserve funds:

 We must have all pages associated with an asset statement even if blank, if the
statement says page 1 of 10, and then we must have page 10 in the file.

 Whose account is it? Must have the name/s of the account holder/s, address and
account numbers printed on the statements. Statements printed from the web will
often not have these required details.

 If the account is in the name of a spouse or partner who is not going to be on the
mortgage application we’ll need to address that issue and determine what
additional documentation will be required.

 Large Deposits: It’s required that we identify the source of all large deposits
outside of the normal deposit pattern. Lenders have varying policies as to what
constitutes a large deposit, for the sake of safety; assume a large deposit is one of
$1000 or more.

 If assets aren’t currently liquid, such as a stock portfolio or retirement account, we
may have to verify that the subject account can be liquidated.

 In most cases, you have to verify that you have 5% of the down payment in your
own funds dedicated to the transaction prior to considering any alternative sources
for down payment monies, such as gift funds.

 Gift funds must be from a family member.

 Self-employed borrowers using funds in business accounts will have to document
that the use of those funds will not negatively impact the business.

 Second mortgages from an employer, institution or community lending program
come with additional guidelines that will need to be discussed when applying for
a mortgage.

 Documentation of remaining funds after the closing (reserve funds) is required on
many programs, and the amount can vary depending on loan program and your
profile. The amount required can vary from two months of payments remaining
up to 12 months of payments in reserve. We’re only permitted to use a percentage
of the balance in non-liquid accounts such as stocks or retirement and we must
verify that the account can be liquidated if needed.

Mortgage Minutiae #12 - Time to Look at Property

In addition to determining credit-worthiness of you, the lender needs to validate the value of the
property. Real Estate appraisals must be performed by independent, licensed and, in most cases,
certified appraisers.

How an appraiser views a property and the nature of appraisal investigation is highly regulated
and restrictive. Among many data fields, the appraisal report is required to address:

 Town and registry data on the property
 Recorded data on the immediate neighborhood
 If the property is legal per city & town records
 The condition of the property along with major systems
 Room count, size & general dimensions
 If proper permits were issued if improved
 Market statistics and conditions
 Comparable sold properties
 Comparable properties on market
 Complete photographs as required by secondary market
 Floor plan on property is drawn by appraiser

Any errors or discrepancies on the appraisal report as compared to other data in the application
process must be resolved. This means that all data throughout must match, i.e. street address, zip
code, and property tax figures.

Much of the frustration with the appraisal process comes from the selection of comparable
properties to support the value of the subject. It’s required that these comparable properties be as
close as possible to the subject in terms of style, age, size and proximity, and timing of sale.

Condominiums require additional work by the appraiser, because the appraiser must validate the
condominium information, and many times this information can only be acquired by obtaining a
completed condo questionnaire. To assist the appraiser and help expedite the process, a copy of
the lender’s condo questionnaire will help. (However, this usually won’t be available at time of
inspect)

Depending on market conditions, an appraisal can take up to two weeks to obtain. However, your
lender can have the full credit approval completed on you while waiting for the appraisal to be
completed.

In this competitive market, be sure to speak with the lender about the risks associated with the
waiving of an appraisal or mortgage contingency.

Admittedly, the appraisal can be one of the most frustrating components of the mortgage process,
especially if the seller and realtor believe that the valuation is low.

Mortgage Minutiae #13 - Condominiums & Multi-Family Properties

As you’ve learned, not only do you go through an exhaustive vetting process prior to mortgage
loan approval, but the property has to meet lender requirements and go through an approval
process as well. For single-family homes, this process is pretty simple.

If you need to factor in rental income to qualify when purchasing a multi-family home, the
appraiser must verify current market rents as a piece of the appraisal process. The appraiser must
verify that the use of the property is “legal”, meaning that it is zoned and taxed as a multi-family
property.

Condominium properties require a more exhaustive investigation.

Although some of the condominium property requirements may appear arbitrary, the rules exist
to protect both you and the lender. Rules are different for small properties (2-4 units) versus
large properties; there are different rules for new construction and new conversions; and the rules
can change with jumbo versus conventional financing.

I won’t get into the specific rules here, but I’ll cover the general areas that are reviewed for
condo approval. There are many nuances, so it’s important to review every property with us at
listing, or when considering an offer, so that we can be sure that the property will meet lending
requirements for your scenario.

Owner Occupancy

Lenders want a high level of owner occupancy in all condo associations. Owner occupants are
considered more likely to maintain their property, pay all fees on time, and manage assessments
or fee increases if required. Statistically, investor owners will stop paying their fees and even the
mortgage if their personal finances get snarled, which can weaken a condo association.

One Owner – high percentage of ownership

One unit owner can’t own more than 10% of the total units. For the reasons outlined above, if
one unit owner owns a high percentage of units and falls upon hard financial times, the entire
association can be at financial risk if that owner stops paying their condo fees.

Adequate Insurance Coverage

Condo fees include the insurance coverage for the entire condominium structure. “Walls In”
coverage has recently been added into the insurance requirements for condo units. Many master
policies cover to the walls of the condo unit and borrowers traditionally would get a more
standard policy to cover fixtures and personal contents. Today, if “Walls In” coverage is not
provided by the master policy, the buyer may be required to get a small amount of additional
coverage.

Mortgage Minutiae #14 – Underwriting - Your Loan Application is Approved!!!!!
(But what are these conditions and what does this really mean????)

After all the data is collected and documented, the loan file goes to the underwriter for final
approval. The underwriter’s job is to go over every box on the loan application and make sure
that the data provided is supported by the documentation in the file. Today it takes over an hour
to underwrite a straight forward file with salaried borrowers. Underwriting for a self-employed
borrower can take over 2 hours. As we have pointed out previously, this is a detailed and
painstaking process.

Generally when an underwriter approves a loan there will be conditions to that approval. A
conditional commitment is not an issue unless there is a condition that you cannot meet. Many
lenders underwrite files early in the process and issue an approval with multiple and complicated
conditions. WATCH OUT! Beware of an approval with multiple conditions. Talk to your lender
about the likelihood of being able to produce the documentation required to support the
conditions.

Once the loan is approved the lender will issue a commitment letter with the conditions itemized
on the document. You then assemble any additional documentation requested. The lender may
also have to provide additional documentation such as a corrected forms due to a type-o or some
updated information. Loan documents have age limits so some conditions are simply to update a
document such as a more recent pay stub or an additional bank statement.

Once the conditions are assembled, the underwriter will review them and as long as no new
questions come up, the loan will be ‘cleared to close’.

Do not let a contingency date pass if there is a condition that you are not confident you can
meet. DO NOT allow a contingency date to pass if the approval is subject to an appraisal or
condo approval or any seller side items that you have no control over.

30% of purchase transaction fall apart just before closing due to loan declines.

If you have multiple conditions on your approval call the lender to determine if the final approval
is at risk. They should speak with you about their ability to meet the conditions. GET AN
EXTENSION on the contingency date if there are any concerns about meeting the conditions.

Work with me because we DO NOT issue an approval if there is a condition on the commitment
that you cannot meet or that could ultimately end in the loan being declined.