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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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Pisnoy: Not being honest and upfront with the loan officer. What tends to happen is that borrowers may not know the information they’re supposed to get. If you’ve been in forbearance, there are rules associated with refinancing. To get out of forbearance, you have to make three months of consecutive payments before you can close on a new loan. These things can come into play and be very problematic. How frequently do forbearance issues delay a refi
Pisnoy: In the past six months, it’s happened a lot. If the borrower has made only a couple of payments, we put the loan on hold until they have made the third payment. The payment has to be timely — you can’t make the June payment on June 30. Once you’ve made the third timely payment, you’re good to go for a refinance. But as a borrower, you have to contact the lender and end the forbearance. Another mistake is not getting preapproved — not just a letter but having your assets looked at, having your income looked at. How can homebuyers navigate this fast-appreciating market
Pisnoy: It’s nuts. We’re in a hot seller’s market. Inventory is low. Sellers are finicky. Real estate agents are finicky. People think that their down payment is all they have to come up with. But there’s closing costs. There’s escrow. In some cases, the buyer has to reimburse the seller for prepaid property taxes. A lot of times, buyers don’t realize that the escrow account has to be funded at closing. The buyer can come to the table and find out they have to lay out another $5,000 for property taxes or insurance. You haven t been pleased with the new Uniform Residential Loan Application used by Fannie Mae and Freddie Mac
Pisnoy: We’re three months in, and it’s very confusing. It went from four pages to 12 pages. On the old Uniform Residential Loan Application, or URLA, your current payment is on the left, your new payment is on the right. Very simple, very easy to compare. The new URLA doesn’t do that. It doesn’t tell you your new payment. It doesn’t give you a side-by-side comparison. How does that make any sense? If you’re refinancing for rate and term, it’s one thing if the loan officer says you’re saving $200, $300, $400 a month. It’s another thing to show it. The new URLA doesn’t change the qualifying dynamic, but it just takes more time. Are self-employed borrowers still finding it difficult to qualify for mortgages
Pisnoy: Lenders put new rules in place during the pandemic. Some of these overlays for self-employed borrowers are going away, so that’s kind of nice. But self-employed borrowers still require more work to underwrite. In some sense, it’s discriminating against the self-employed borrower. We try to prepare borrowers. Get your business bank statements ready. Get your K-1 statements ready, if you have them. Make sure your bank statements match your profit and loss. We don’t want a lender to say, “Your bank statements only show $10,000, but your profit and loss statement shows $100,000.” Learn more
SHARE: Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. Related Articles