July 6, 2018.
You can’t shock your loan officer. They’ve heard it all before. Count on the fact that your loan officer has answers to all the uncomfortable mortgage questions you may be too afraid to ask. Itchy topics like getting a home loan with no job, taking an ex off your mortgage after divorce, and filing for bankruptcy aren’t as scary as you think.
Work with a loan officer who feels like a friend. We’re lending in 38 states (and the District of Columbia).
Opening up your personal life and your finances to someone you just met isn’t easy. Understandably, many borrowers are hesitant about laying all their cards on the table. Vanguard’s 2017 research found that a strong financial relationship is built largely on emotional trust. In short, looking out for a borrower’s interest. Finding a loan officer who’s not only willing but happy to answer some of your stickier mortgage questions can empower you to make a financial decision you’ll be happy with.
Save yourself the embarrassment. Get your mortgage questions answered fast.
Life happens. And when it does, your loan officer has answers:
1. Can I get a home loan with no job?
A big part of getting prequalified and approved for a mortgage is verifying your employment and income. Your lender will look at your debt-to-income ratio, W2s for the past 2 years, credit, and more. So what happens when you lose your job before or during the homebuying process? Will you lose your deposit, and can you still qualify? More than anything, it’s important to be honest. That’s what your loan officer is there for. Failing to disclose that you lost your job before closing could increase your risk of loan default and foreclosure — both in the real world and in the eyes of your lender.
Depending on your financial situation, you may have to scale back. After a job loss, your loan officer will recalculate your earnings, submit a new mortgage application, and provide you with new options. You might qualify for a smaller loan and get to buy a house in that price bracket. Or, you may still qualify for the same loan amount if you have more than one job or a low debt-to-income ratio.
Sellers pay more attention to serious buyers. Get prequalified before you house hunt and get home fast.
2. How do I take an ex off my mortgage after I get divorced?
You’ve separated from your spouse. But can you divorce your mortgage? During a divorce, factors like mortgage payments, utility bills, home size, and family living arrangements all come into play.
Two options are frequently used to come to a resolution:
- Sell your house.
- Have one spouse buy out the other.
Selling and dividing the profits is an easy way to resolve the issue of homeownership after divorce. If one partner prefers to keep the house, the spouses will need to settle on a buyout figure — i.e., the home’s appraised value minus the cost of selling to equal the amount of leftover equity split between both parties. Spouses can also arrange a fair buyout figure they both agree on. The spouse keeping the home may then decide to use a mortgage refinance to pay the buyout. Fannie Mae lets a partner borrow up to 95 percent of their home’s appraised value during a buyout. Purchasing back a home with this option will remove the other partner from the home’s title.
3. Does my husband/wife have to be on the loan or deed?
Having a spouse as a co-borrower on a mortgage can help to improve your odds of qualification based on credit score, employment history, and income. But in some cases, you may have a better outlook by keeping your partner off the loan if their debt or credit score could hurt you. In the U.S., you aren’t required to apply for a mortgage in both married names. Bear in mind that your non-borrowing partner may still need to get a credit check during the mortgage process. In this case, the spouse responsible for the mortgage will be the sole name listed on the home’s deed and will also be the sole person legally responsible for payments. While only the borrower is listed on a home’s deed, a non-borrowing spouse can be added to a home’s title using a quitclaim deed.
Adding your partner’s name to your mortgage in the future is possible. You can contact your loan officer with this request, and they’ll either decline or accept by making a mortgage modification. Refinancing your mortgage — taking out a new loan to replace your current mortgage — will also allow you to apply again as co-borrowers.
4. What happens to my mortgage when I file for bankruptcy?
When faced with bankruptcy, keeping your home is likely to be among your biggest concerns. Legally, a mortgage lender can’t punish you for filing bankruptcy by changing your loan terms or raising your rate. Some homeowners filing for Chapter 7 bankruptcy may be at risk of losing their home. A homeowner filing for Chapter 13 bankruptcy may be permitted to keep their house and continue paying their mortgage. This is the time to call or sit down with your loan officer. They’re always there to help. Your loan officer will find ways to work with you, with options to modify or reaffirm your loan, so you can keep paying on and living in your house.
5. Does it matter if I owe back child support?
Child support arrears can show up as a negative mark on your credit — another component that factors into your mortgage prequalification. Back child support that has reached the collection or judgment phase may make you look like a greater risk to a lender. Talking openly with your loan officer, as well as discussing the ways you’re trying to pay down the debt, could improve your odds of loan eligibility. Neglecting to tell your loan officer in the hopes that arrears won’t show up on your credit report could sabotage your loan approval.
To show how you’re managing your debt, your loan officer may ask for a court-approved repayment plan or proof of payment. Paying the debt in full can also ease the burden on your credit and will make you eligible for mortgage programs like FHA and VA that require either a formal child support arrears repayment plan or total payoff.
6. I didn’t pay my property taxes, and I received a letter from my lender. What do I do?
Homeowners pay property taxes to fund county and municipal services. If you didn’t or couldn’t pay your property tax bill, your local tax office will begin charging monthly interest. You may also be charged penalties for overdue payment. If this continues, a tax lien will be placed on your property, indicating that you can’t sell your home until the tax bill is paid. If you’ve received a tax notice or a letter from your lender, it’s important to contact both a tax attorney and your loan officer as soon as possible. Failing to pay property taxes is considered an “event of default” and could put you at risk for foreclosure, even when making monthly mortgage payments.
Your loan officer can walk you through the relief options available to get you back on track, including:
- Making late payments.
- Requesting a tax deferral.
- Establishing a payment plan.
- Taking out a property tax loan to pay down the debt in monthly installments.
7. Why do you need to know where the money deposited in my account comes from?
During the mortgage approval process, large deposits unrelated to your earnings require some explanation. An underwriter will typically ask for verification on a significant deposit to ensure it came from an acceptable source. Confirming a large deposit is also another way for an underwriter to find out if you’ve taken on a new loan or line of credit, potentially affecting your debt-to-income ratio and the loan amount you can afford.
8. Do I have to keep the realtor I started with?
It happens. Some buyers decide to break up with their realtor after the contract’s been signed because of poor communication, lack of experience, weak negotiating skills, personality mismatches, and more. Ultimately, you’re in the driver’s seat because you’re the one making the investment. But how to do this delicately?
If you’re dissatisfied with the service you’ve received from your realtor, you can:
- Go to the brokerage and request another agent.
- Select another agent from another brokerage.
- Ask your loan officer for a Realtor Partner referral.
In some cases, an early termination fee may be required in your listing contract. It also helps to document any instances where you feel your agent dropped the ball to supply examples if requested. When terminating representation, many agents would appreciate an honest conversation or email explaining any issues. It’s possible problems or miscommunications could be resolved before a breakup is needed. Nonetheless, it’s well within your right to switch realtors while in escrow without providing an explanation.
Buying a house feels easy when your loan officer’s doing the heavy lifting.
9. Will my mortgage be sold to another company after I buy a house?
It’s likely. Since a mortgage is paid back slowly, normally over a term of 15 to 30 years, mortgage lenders aren’t always able to service every home loan they fund. If they did, these outstanding balances could add up to billions of dollars in available funds. So, borrowers’ loans are often bundled and sold to investors, normally based on risk level. Government agencies like Freddie Mac and Fannie Mae are frequent investors.
Selling a loan to a servicing company is one way many lenders stay in business: It frees up the funds a lender needs to take on new borrowers, and it allows a lender to continue to offer affordable loan programs with competitive rates. Suffice it to say, this practice is commonplace. A lender has the right to sell your loan to a servicing company at any time. In order to do so, borrower notification is needed no less than 15 days prior to the transfer. When a servicing company takes over, there’s little to worry about on your part. Your mortgage terms and payment (with the exception of adjustable-rate interest) will remain the same, and you’ll pay to a new company each month.
10. What do I do when the mortgage company loses my payment?
If your payment has been lost in the mail, or if you think your mortgage company or loan servicer has lost your payment, it’s important to contact their customer service number or servicing number immediately. Your lender will be able to help you track down your payment and get it properly credited to your account. Assuming you paid by check, contact your bank to see if your check has cleared and have that information handy. Your bank can verify when a check was sent and deposited, and where, to provide proof of payment.
If a check was lost in the mail, contact your bank directly to stop payment. Then, contact your servicing company to let them know about the situation and that you’ll be sending another payment. Making payments online and checking that each monthly payment goes through can prevent miscommunications and keep your loan from going into default.
11. I’m in over my head and can’t make my mortgage payment. What should I do?
There are several options available to you 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 loan officer wants to help you keep your home as much as you do and can explore options like mortgage refinance, loan modification, a repayment plan, mortgage assistance programs, forbearance, or short-selling your home before more extreme actions are needed, like foreclosure or bankruptcy. The Consumer Financial Protection Bureau also recommends meeting with a free HUD-approved housing counselor to receive professional guidance that can help you to avoid foreclosure.
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For educational purposes only. Please contact a qualified professional for specific guidance.
Sources deemed reliable but not guaranteed.