Mar 31 • General discussion
Why Two Lenders Gave You Different Qualification Numbers (And What's Really Going On)
Ever had two different lenders give you completely different numbers on what you qualify for? It's more common than you'd think, and there's a straightforward reason behind it.
Here's the key thing to understand: lenders are qualifying you based on your monthly payment, not the total loan amount. That one concept explains almost every discrepancy you'll run into.
Several things can push that monthly payment up and knock your qualification down:
- Property taxes (these vary a LOT by county and city)
- - Homeowners insurance
- - HOA or condo fees (often $300-$400/month)
- - Land lease fees, which are common in some western states
So you might qualify for $250,000 in a rural county with low taxes, but look at a home in a higher-tax suburb and suddenly that same payment no longer works for the same loan amount. Same income, same credit different result.
Lenders also differ because of overlays. The VA doesn't set a maximum DTI, but most lenders apply their own cap anyway. One lender might stop at 50% DTI while another will go higher under certain conditions. These internal rules are called lender overlays, and they're a big reason why two lenders can look at the same file and give you different answers.
Income interpretation is another factor. Overtime, bonuses, and commission income get treated differently depending on the lender and how experienced your loan officer is. A skilled loan officer digs for documentation and pushes for favorable interpretations. A less experienced one might count income that underwriting later rejects which leads to an inflated pre-qual that falls apart later.
If your income situation is anything other than straightforward, working with a broker who can shop your file across multiple lenders can genuinely change your outcome.
The bottom line: always ask your lender exactly which costs they included in your payment estimate, and how they're treating your income.
Have you ever gotten different qualification amounts from different lenders? What was your experience?
Read the full article here: https://www.scarpero.com/why-qualification-amounts-vary/
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Why Two Lenders Gave You Different Qualification Numbers (And What's Really Going On)
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Learn more about the VA home loan program. Hosted by Carlos Scarpero, VA Mortgage Specialist. NMLS 1674385
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