First-Time Home Buyer Angst

I've worked with three first time home buyers this year. All were gainfully employed, great credit risks, and had ample reserves. Even having all of the criteria needed, they all still had a tough time getting a final loan approval.

Let's look at the past 10 years. The requirement to get a loan a few years ago, was simple,  If you had a pulse and walked on your hind legs you were instantly approved for a loan.

When I first started in this business, I went to a colleague and expressed my concern about a young man who wanted purchase a home for almost $700,000. The other Realtor  said "Anyone can get a loan, you basically fill out a loan app and you're done." The buyer eventually went to a more experienced Realtor and purchase the home.

With the sub-prime days behind us the Banks lending money for homes have done a complete re-vamping of lending policies. Buyers sometimes don't get a final loan approval for almost a month. Even then, they are required to "meet additional conditions."

What could they possible want? On one occasion a lender required a couple to obtain letters from all of the guests at thier wedding who gave them a monatary gift. The reason for that is the banks do not like "phantom" money that is suddenly deposited into your accounts. Lenders may ask for a letter from your current landlord to make sure your rent was paid in a timely manner.

There is some good news. Since the 2008 meltdown, none of the homebuyers I have worked with have been turned down for a loan.  The mortgage brokers know from the starting point if the potential buyers will be turned down. They do, however, let people know that it's going to be a bumpy ride, and nothing is guaranteed.