Kristen Dillingham: 00:21

Hey, guys. I'm Kristen. This is the admin edition of the Wisdom Lifestyle and Money podcast. And so I'm Kristen Dillingham, sister of Scott Dillingham. And we also have

Kayla Miller: 00:36

Oh, my name is Kayla. And I'm Jillian.

Kristen Dillingham: 00:40

And we're here today to talk about the mortgage processes and proper documents, what to expect, and a little bit about ourselves before we started working in mortgages. Jillian, to get things started, what have you learned since you started working in mortgages?

Kayla Miller: 01:01

I when I first started, I knew nothing about mortgages. So I pretty much started from 0 and learned from both you and Kayla and Kristen. I've learned that it's much simpler to get a mortgage than I originally thought, but that's also dependent on your situation as well.

Jillian Barnes: 01:24

What about you, Kayla? I guess to piggyback off that, you say it's simple, and I know it does depend on the scenarios. However, it also depends on proper documentation, which we will get to. But, before this, I was in medical care, and I just learning everything. I started here and now I know the process somewhat.

Jillian Barnes: 01:47

I have to go through it myself, but, yeah, just learning from Kristen.

Kristen Dillingham: 01:53

And I had no experience in this field. I too was in health care. I started here with Scott when he opened up in 2018. And basically, I learned from Scott. By the way, if we say basically a lot, it's our go to word.

Kristen Dillingham: 02:10

So like you guys, no experience but one big thing is proper financing. Like instead of buying a car, you could buy a car that maybe is not so expensive and then save that money, that's something I had never done. But now working in mortgages, I learned, still learning, but I learned how to budget properly because getting into a home is greater than buying a fancy car every couple years.

Jillian Barnes: 02:41

And to piggyback off the car, everyone always says once you drive the car off the lot, it depreciates in value, but I wish someone told me really why and the other factors too. Like, a larger car payment really impacts your way of getting financing. So I wish that part was also taught, but that's what we're here to bring a few points to you guys.

Kristen Dillingham: 03:05

So let's talk about the process of applying with Land City Mortgages. Jillian, say a new lead comes in, what do you do?

Kayla Miller: 03:14

The first thing we do is the lead comes in from the agent. So, usually, a client will contact the agent, and then the one of the mortgage agents will send us an onboarding, which has the contact information for all of, the clients and, information, what kind of what they wanna do if they're a first time home buyer, if they're an investor. From there, we send out the application for them to fill out, and then we ask them for proper documentation, which I'm sure we'll touch on the list. It's income docs just so we can get a better picture of where your situation is at. We'll cross reference that with the application that's completed, and then this is just a gist.

Kayla Miller: 03:56

Once that's done, the agent will review and then give the client a best idea of where they're at with their mortgage.

Kristen Dillingham: 04:03

Now say I'm applying and I submit a job letter that's handwritten. Is that acceptable? No. Why why though? It's from my boss.

Kristen Dillingham: 04:12

Who cares?

Jillian Barnes: 04:13

There's a few factors. One, we could touch on if it's handwritten, did the boss sign it? If they didn't sign it, I know a lot of lenders do require a superior or HR to sign off on the letter so then we can call and confirm your employment that way as long or as well as the lenders do. What else do we require on the job letter? Title head.

Kristen Dillingham: 04:38

Yeah.

Kayla Miller: 04:39

Yeah. Letter head. We want

Jillian Barnes: 04:40

the letter head or title head or symbol of the company on the document to make it more official. Non editable. Is that a word? Yeah. If we get a Word

Kristen Dillingham: 04:50

document that's editable Yeah. We can save it as a PDF. However, that means at some point, we could have altered the document, and typically the lenders will decline it right away.

Kayla Miller: 05:01

And that kinda looks like you wrote it yourself or something. If someone sends you a Word doc, it's like, who typed this up?

Jillian Barnes: 05:06

The main thing too with submitting documentation, that I think everybody needs to know is even though you don't know what the lender's requiring, look at it from that standpoint where the lender doesn't know that's your job. Like, the lender doesn't know those are your bank statements unless your name is on it. They're coming from a very blind perspective of your file. So that's one thing when you're getting this information, they want, are you hour hourly or salary? Do you have a minimum amount of hours?

Jillian Barnes: 05:38

They wanna see all this to confirm, and I think with COVID, it really changed all the lenders' policies on what they do wanna see on it, and that's why you see some generations say this is so much to ask for, but the policies have changed so much that they all have to assume it's, like, people are committing fraud, not saying everyone is, but they have to assume that until they can check out all of your documentation. And one catch too,

Kristen Dillingham: 06:05

if it's over 30 days, the lenders typically will ask for an updated job letter. Some will let it go 60 days. But if we are asking you for updated documents and you're thinking, I literally just sent them that, it's probably because they're over 30 days old. And it's not us asking. It's the lender that's asking.

Kayla Miller: 06:25

Yeah. I think that's a big topic. Like

Kristen Dillingham: 06:27

Same with pay stubs.

Kayla Miller: 06:28

Yeah. A lot of clients think that we're the ones asking when it's actually the lender, the bank that's giving you the money that needs the documentation.

Kristen Dillingham: 06:37

Same with pay stubs. When we're looking at a pay stub, we wanna see that it has your name on it, has the employer's name somewhere on it, that the year to date matches up. So if your job letter says you work 80 hours biweekly at whatever wage, we will calculate that based on how many pay periods. And if the year to date's low, say it's $4,000 lower than it should be, we will ask, you know, your pay stubs are lower. Was there a reason?

Kristen Dillingham: 07:05

9 times out of 10, people will say, oh, yeah. I just took some unpaid time off. I went on an extended vacation. As long as we have an explanation, it's usually okay. But if sending us images of pay stubs that are blurry, they're cut off, we will have to come back and ask for better images.

Kristen Dillingham: 07:23

So just bear with us on that because the lenders have policies and they need to be able to read the entire Document. Yeah. Thank you. You're welcome. So the next thing I wanted to touch on was identification.

Kristen Dillingham: 07:39

So we need 2 pieces of ID, the front and backside. For our compliance reasons we want to verify it's you. But one catch is we cannot accept health cards and I think it's because we are not a medical facility but we can accept any other types of government ID. And a couple unique ones we've gotten, I received, I believe it was like a hunting license Yeah. Or a and a gun license, and that was acceptable.

Kayla Miller: 08:07

I think it's it's government issue. Right? So that makes sense.

Kristen Dillingham: 08:10

But we can't accept school IDs or what's one form of ID you guys have received that

Jillian Barnes: 08:17

We can't accept? That's a good question.

Kristen Dillingham: 08:20

Like, we have work IDs, but we can accept those.

Kayla Miller: 08:24

Yeah. I've gotten a work ID, ID, like an employment card before and it's you can't use that.

Kristen Dillingham: 08:29

Health cards, we delete right away. We're not even supposed to have them in our records.

Kayla Miller: 08:33

I don't know. I've received marriage license before, but I think we can use that. I'm not I'm For ID?

Kristen Dillingham: 08:38

Yeah. I'd have to look into that one.

Kayla Miller: 08:40

Yeah. I've received a marriage license before.

Kristen Dillingham: 08:43

But typically we get SIM cards front and back. Even though the SIM card the new ones, I don't believe have anything on the back. We still need it. Driver's license front and back, birth certificates Passport. Yep.

Kristen Dillingham: 08:55

Passport. We don't really need the back of the passport. It's literally

Kayla Miller: 08:58

Just like the cover pay like the open yeah.

Kristen Dillingham: 09:01

Yeah. So basically, as long as we have front and back, it's clear. It's perfect. Now say you're applying with us and you have a large portfolio already. You have multiple properties that are lee that are rental properties.

Kristen Dillingham: 09:14

What types of documents will we need for that?

Kayla Miller: 09:17

We usually ask for recent leases. I know that's difficult if there's, like, month to month leases, but, that's from, I don't know, 2017. But in that case, we would ask for, a tenant acknowledgment form to be signed. We also require the t ones, if you've owned it for more than 1 or 2 years just so we can see the rental income that you record on your t ones.

Jillian Barnes: 09:43

And then along with that, we'll need all the property documents. So we have to make sure that when you fill out the application, everything is sorry. We have to make sure that everything is filled out accurately. So that's the mortgage statements, property tax bill. I know there's a few scenarios where clients' mortgage also has the property tax amount combined with it, but what they wanna see is the city version of the tax bill to ensure that taxes are up to date.

Jillian Barnes: 10:15

We can go more in-depth on that and explain that a bit later. And then, like Jillian said, those lease agreements and the tenant acknowledgment, I know it can be a little bit of a pain in the butt when you have a big portfolio. This is to ensure that when Scott or your agent runs your numbers, everything is ran correct. Because if we don't have those documents, we can't assume because we don't want that on us, but then we also don't wanna tell you guys you're preapproved for x amount. But then when you provide your documents, that's not there to back it up.

Jillian Barnes: 10:51

And we don't want that to hurt the clients. Now some of

Kristen Dillingham: 10:55

the mortgages will report on the bureau. And if the home is in Windsor, we do have access to the city of Windsor tax assessment page. However, it doesn't show if you owe any back taxes so the lenders typically won't accept that. But say you have rentals that would be lenders or private, that's not going to report on the bureau. So that's why we ask for those documents just to ensure that we have the proper numbers.

Kristen Dillingham: 11:21

And if you have multiple rentals, another question we'll ask is if you have a property management company because if you do, we have to add that in under, like, management fees. So say the one unit or the one property has 2 doors on it, your management fee may be $200 a month, let's say. So we have to add that in. If we find that out after you're approved for a mortgage and the lender re redoes the numbers adding that new management fee, that could harm your file. So the more you can disclose upfront, it is a lot of work but it'll protect you in the long run because we'll have everything accurate and up to date.

Kristen Dillingham: 12:00

So the next topic I have here is why do we need assets list listed on the application?

Jillian Barnes: 12:08

Alright. Like, we need assets. The lenders wanna see, is there anything you can fall back on? Worst case scenario, is there anything that we can do to help? Maybe there's a debt that you can pay off and that'll bump up your purchasing power.

Jillian Barnes: 12:25

So assets really do come in very handy. It could be, do you own vehicles? Do you have, like, household goods, I guess? There was a scenario where I actually had someone sell off their truck to help their purchasing power. So they just wanna see that.

Jillian Barnes: 12:44

Are there any additional savings? So when Scott or the agent runs the numbers, they can grab well, not grab, but they can say, if we shift this asset to here to help pay some of this off, it bumps it up x amount.

Kayla Miller: 12:59

Yep. I usually tell the clients, like, give us the best list of assets you have, specifically for closing costs so the lender knows you have closing costs. I also tell them that it gives Scott or the agent, some creative ideas. In case your ratios are at a line or anything like that, they gonna be like like you said, pay off. You have enough money to pay off this debt.

Kayla Miller: 13:20

We can do that. Or you put more down payment. I know that you have extra savings, some some options.

Kristen Dillingham: 13:27

And another reason Scott likes to see the assets listed because there's high net worth programs. Now I don't know all the details of those, but if your income is very low, say you're retired and you're just receiving pension or something like that but you have 1,000,000 of dollars saved up that's gonna pay you back over time, there's programs for that. So that's like another reason. And like Gillian was saying, for the closing costs, sometimes the lawyer fees or say you're buying a new house, the land transfer tax, those are some unforeseen costs. So if we know that you have a good chunk saved up in savings, like, we know that you'll have money on closing and it's not gonna be a surprise that, oh you owe an extra $6 for land transfer, but if you don't have any saved, it's good to have a backup plan.

Kristen Dillingham: 14:19

So one other topic I wanna touch on is say we're doing a refinance of your home and we have to order an appraisal because it's required by the lender before they'll fund the mortgage, a couple of things to keep in mind. When an appraiser goes in, they're gonna take photos of the condition of your home. So I would recommend cleaning your house. If you have pets and the pets are in the photos, that's we like that because sometimes we get to see the, a copy of the report. Sometimes we don't though.

Kristen Dillingham: 14:49

It goes directly to the lender. But keeping your house as clean as possible And if the appraiser comes in and they're like, we don't know if we can get you the value that you're looking for, you can say, you know what? We just redid this room. This has brand new hardwood flooring. It costs us this much.

Kristen Dillingham: 15:07

We have this brand new countertop. It's not what's that wood material that I'm thinking of? Just the regular countertops with the Like the plywood? Yeah. Or the pressboardwood.

Kristen Dillingham: 15:18

I don't know. But, look, if you have granite countertops versus that, that's gonna help boost the value too. If you have, little things like that will help boost the value that you can point out to the appraiser when they're like or if you just got brand new windows. Sometimes you can't tell but you can say, hey look, I just put $20,000 worth of brand new windows and doors in my home. So those are little things to keep in mind that might help boost the value of your home.

Kayla Miller: 15:44

I would definitely say the one yeah. What you touched on, the one thing you can do is if you know the appraisal's happening, make sure your house is clean and tidy.

Jillian Barnes: 15:53

You don't have to go scrubbing floor like crazy. You just everything that's out, I would just put in a bin, trying to cover it. No one knows. Exactly.

Kayla Miller: 16:02

They're not gonna go in all your cupboards or anything. So just

Kristen Dillingham: 16:05

yeah. Yeah. Find a closet. Yeah. Put everything in there.

Kristen Dillingham: 16:08

Actually, no. They do take photos of garages too sometimes.

Jillian Barnes: 16:11

Or just cut the grass too.

Kayla Miller: 16:13

And Oh, yeah.

Jillian Barnes: 16:14

It's simple. I know, like, it's a stressful time. A lot of people are, like, selling and buying, so I know you're busy, but that little might get you to that value that you do need to get to. Not guaranteeing anything, but it could be But I'm saying it is beneficial.

Kristen Dillingham: 16:30

Alright. So I just wanted to thank you guys for just sitting down and listening to us ramble. Although we don't have a lot of great investment advice, we do have some pretty good mortgage experience that we wanna continue to share with you guys. So with that, Kayla, take us away or take it away.

Jillian Barnes: 16:49

Alright. Yeah. So that's it for today. We're gonna try and put out more episodes. But if you do have any questions about anything we discussed, don't hesitate to reach out, call, email, stop by within office hours.

Jillian Barnes: 17:03

Yeah. And we are here to help out and hopefully just bring a different perspective to your whole process to point out these little tips and tricks.