finance
It’s Time to Get
back in the game
Text Jeff Devereaux
Having difficulty obtaining a loan? Prepare for the application process by learning basic lending guidelines. TEXT Jeff Devereaux
The last five years have definitely had a negative impact on consumer confidence, specifically regarding the housing market. Rapid foreclosure and job loss sent the economy reeling in a downward spiral. Every time you turn on the TV, read the newspaper, check out a blog or visit a social networking site, there seems to be an overwhelmingly negative message regarding the stability of our economy. People are scared to plan for a future when they are uncertain of the now. At once a most prized possession and person’s greatest asset (the home), is now being devalued daily and new homes aren’t even being built. To add to the frustration, it’s difficult to get a loan these days. The big bad banks caused this mess and they are making customers bail them out. Isn’t this the message people hear? Some of this may be true in certain pockets of the country where sub-prime lenders preyed on naïve borrowers trying to achieve the American Dream. But in the majority of Tennessee communities are trying to stabilize and borrowers are being better educated by qualified mortgage professionals. Community banks are committed to helping their customers through the good times and bad times. Affordable financing is available 98 | At Home Tennessee • October 2011
for all types of borrowers. You can still buy a home for much less than what it costs to rent each month. Homes in all price ranges have much more attractive rates and terms than ever before. Even jumbo financing has become more borrower friendly and affordable. This is all good news, not bad or negative. It’s time to get off the sidelines and get back in the game. The game has not changed, but the rules are now beginning to be enforced, and rightfully so. It all begins with the application and approval process. Is the loan process more demanding, stringent and detailed than before? Of course it is, and it should be. The concept of proving a person can adequately repay a loan should not be misunderstood as a lack of credit available. Additionally, the concept of proving down payment as money a person earned or saved should not be misunderstood as tighter lending guidelines. These are merely basic, sound lending practices. To adequately satisfy these requirements, all borrowers should be prepared to provide the following: • W2 forms (two years) and current pay stub(s) covering most recent 30 days • Employment addresses (two-year history)
• Signed sales contract and legal description • Latest two months’ bank statements (all bank accounts) • Open loans: addresses, account numbers, balances and monthly payments • Real estate owned: loan numbers, addresses, balances and monthly payment schedules • Social Security number(s) • If self employed, or if more than 25 percent of income comes from bonuses, commission or overtime, two years’ tax returns with all schedules and W2s • Payment for credit report and appraisal. Requiring and verifying the above documentation are practices that responsible lending institutions should have always been practicing. Simply go through this checklist to be sure you meet all qualifications. The lending process doesn’t have to be discouraging when you know what is expected of you.
— Jeff Devereaux Division Sales Manager/ Executive Vice President