This is why it might not always be the best idea to use your bank to do a mortgage. When I first started in this industry, I actually worked for a bank as their mortgage loan officer. A lot of people would come in and they’d say, “Hey, I do my checking and my savings here. I do my banking with you. This should be easy.”
Why Banks Have Extra Restrictions Other Lenders Don’t
The part they were mistaken on is that guidelines are set by the investors of the loan program that you’re using. So FHA, conventional, VA… they set the guidelines. Lenders can also have what’s called overlays, which means they add on to the guidelines.
For example, the bank that I worked at, FHA would allow people to do a home loan after three years from a foreclosure. But the bank that I worked at said, “We won’t take anybody unless it’s been seven years since they had a foreclosure.” So there would be times where I wouldn’t be able to help somebody even though they met the guidelines of the loan program they were trying to do.
Why an Independent Broker Gives You More Options
When you’re working with a bank, you’re limited to their guidelines and the policies they set for the type of client they want. In a lot of cases, it’s better to work with a local independent mortgage broker who’s able to shop multiple lenders, give multiple loan programs, different options, different rates, and a lot more availability to get you approved.
So keep in mind, just because you do your banking with somebody doesn’t mean they’re just going to give you the green light. You still have to go through the same process as you would with any other lender, but they might have extra guidelines on top of that that could put you in a roadblock.
