LOW CREDIT SCORE – Before you pull credit, ask them what they believe their score is. If they say a low number, ask them why. They may give you the immediate answer right away.

HIGH DTI – Not only ask about the tradelines on their credit. Make sure you add are there any recurring debts on the bank accounts they are going to give you to show available assets and if so, what are they? Do a manual calculation on what their income needs to be based on the loan size they are asking for and monthly debts they give you.

INSUFFICIENT INCOME – Rather just asking for employment and hourly income. Ask how they are paid, have they had any gaps, did they take any unpaid time off, do they have a unique pay scale, is any portion of the income commission, bonus, or OT. Especially for nurses.

UNVERIFIABLE EMPLOYMENT HISTORY – Did they get paid cash under the table. Did they report their full income on S/E, did they write off a lot and do they report their rental income on the Schedule E.

INSUFFICIENT DOWN PAYMENT – Where are they getting the down payment from? Ask where it came from and if they are gifting and who they are gifting it from. The key is that they can paper trail and document.

PROPERTY ISSUES – Have a candid conversation with the realtor and/or buyer if there are any issues with the property or unique contract negotiations like giving furniture or allowances.

LOAN TYPE RESTRICTIONS – This is where originators sell a product that a borrower does not qualify for. Most of these are USDA over the income limit or all the new AMI specialty products. I also see quite a few who sell with a community second that they do not qualify for and kills the deal due to no other options for down payment.

RECENT CREDIT HISTORY – Always ask IF they have bought anything recently or if they plan to before closing. The inquiry section of the credit report is there for a good reason. Also, any financing for items from Amazon, eBay, Walmart etc.

INADEQUATE DOCUMENTATION – Ask if they can provide tax returns, stubs, W2’s etc. and if there is anything you should know that may be on them.

LEGAL ISSUES – Asking about judgments, liens, collections, or legal issues is part of the declarations. Dig in and be clear that you pull a report that will show any items in the past or currently happening.

The more questions you ask the more prepared you will be.

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