Taking out a mortgage—likely a necessity for all but the most affluent New Yorker—can be a daunting process, and not just for buyers. Financing a home may be one of the biggest decisions you'll ever make, and it's natural that you'll have plenty of questions—but, says one broker, make sure they're the right ones.
Joseph Leffe, a mortgage loan officer with TD Bank, has been in the business since 2005, helping buyers finance their purchases of condos, co-ops, and houses throughout the tri-state area. And over that time period, he's had his share of frustrations: Clients who don't do their research, hire overly aggressive realtors, and fail to follow basic directions jam up the process, he says, making his job and their own lives more difficult.
We spoke to Leffe to learn about his top five pet peeves—and how to be the ideal client, and get that loan all the more quickly. Read on to learn, in his own words, how you might be driving your broker crazy.
Stop trying to be a bank executive. You can't micromanage the process. TD Bank handles billions of dollars a year in mortgages, but I have clients who are constantly asking me questions about who's going to review documents, what are that person's qualifications, telling me the bank should hire different people. I can't get through to them and explain to them logically that they need to chill out.
Hiring an overly aggressive realtor
I know realtors want updates all the way through, but I'm not working for them—I'm going to do exactly what I'm supposed to do for my customer. I've had realtors bombard me with exclamations as though someone's puppy is going to die if we don't close by the 29th, and it's going to be my fault.
A good realtor understands that there's a process to every work flow, and it's not going to go faster because someone's jumping up and down. There's a normal course of business, and creating an environment of stress makes it an unpleasant experience for everyone.
Turning in incomplete documents
If we ask for a document, just give it to us.
There are customers who are not forthcoming with documents, but are constantly asking if there is any news or updates. Or some turn in their documents, but they leave out pages. Why would you do that? I've told clients I need a real, up-to-date bank statement, and gotten back emailed screenshots of statements from two months ago.
The same goes for the management companies for co-ops and condos. If we send you a questionnaire, fill out every question. Sometimes, they'll just leave questions blank and send it back. What planet are they from? We need to do 100 percent due diligence.
Not doing your research
Sometimes people come in and ask, "What's the most I can qualify for?" If you don't even have an example of a property you're interested in, you shouldn't be asking that question. It's the worst way to start your mortgage journey. Taking out the maximum possible loan is not the goal, unless you want to be eating ramen noodles every night. (Note, though, that you will need a pre-approval letter, in which a broker looks at your income and financial history and preapproves you for a loan; more on that here.)
What makes that question more egregious is when you haven't even done any research, and have no example or even knowledge of what exists in the areas you want to purchase in. You should research first to get a sense of purchase prices, taxes, and liabilities. "What's the max I can take out?" is not an answerable question otherwise. It's trying to start with financing first and that's backwards.
You have to take some initiative. Banks are for-profit organizations—they're not doing case-by-case outreach.
Being stubborn about finances
Sometimes, a person is already overextended without taking on more debt. Maybe they have car loans, college loans, and they can't borrow anything additional at all. I'm explaining this to them and they'll say, "What if I put more money down?" That tells me you're not listening. Sometimes I play the role of teacher and I'm happy to do that, but I appreciate the person actually absorbing what I'm telling them.
If you don't qualify, you don't qualify. I'm explaining with math why, giving you the dignity and respect you deserve so you understand, learn, and grow from the situation, and can improve your life with information. Listen, and stop trying to come up with alternative facts.
Sometimes self-employed people will ask me, "How much do I have to make?" I can't answer that. I'm not here to craft your income and structure your tax return. I used to do hypotheticals when I was green, but I found that that's a waste of time for both of us.
And don't tell me about the cash you make off the books—that's invisible and will have no bearing on what you qualify for.
Now, how to be an ideal client (and get your loan faster)
The perfect client asks good questions and listens. When folks inquire about financing on a particular property they saw, either online or in person, it is a much easier and smarter conversation to have because there's an exact example and starting point and we can deal in facts, not fiction. (Rather than saying "What's the maximum I can qualify for... and go!") Questions about debt-to-income ratio and loan-to-value ratio show that a borrower has done some research as well. And they send in documents—exactly what's required—in a timely manner. That's basically it—it's actually not hard to be a good mortgage client.
Do some research—coming to me to learn everything is not the best idea. Instead, we could invite you to a homebuyers' seminar. People come in and learn, and we do those regularly. I can't have an hour and a half conversation with every single person that wants to learn or else I'd never do a sustainable amount of mortgages, but I can give seminars to a group of five to 10 people at a time.
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