If you want to Qualify for a Mortgage in Arizona, the best place to start is at United Mortgage Financial Group. First, there is an application.  Then, a credit report is pulled to determine your eligibility and DTI.  DTI is debt to income ratio which should not be more than 38%.  Once everything is reviewed, it is sent to underwriting for pre-approval. Once pre-approval is completed, more paperwork is required to finalize your approval including pay stubs, investment income reports, tax returns, and more.  Overall, you can expect a mortgage process that takes about 30 days.

Mike Goblet explains the entire process in this episode:

Matt O’Brien:  Welcome back to another segment of Arizona Mortgage News. We’re here with Mike Goblet, our resident expert from United Mortgage and Financial Group. Today, we’re going to cover the second part of a 10‑part series on what you need to know about mortgages.

Mike, what’s today’s topic?

Mike Goblet:  Today’s topic is qualifying for a mortgage, what’s the process to qualify for a mortgage. It really starts with an application, which actually, I can do over the phone in about 15 minutes generally or can email a copy of the interview form that I use to somebody to complete and then re‑submit.

Once that happens, I then need to take the information I gather, pull the person’s credit so that we can tie it to a couple of factors. Number one, I need to determine the income ratios versus the debt. It’s called DTI, debt‑to‑income ratios.

Number two, to find out if there are any derogatories on the credit report that would not only just give me the score, which I need, as we talked about the prior segment, but derogatories that could impact the ability to qualify a BK, mortgage lates that we’ve talked about in that information.

There are two key ratios in terms of the DTI that I talked about. That is, number one, what they call the front end ratio, and that’s your new mortgage including all that’s attached to it, meaning principal, interest, assets, and insurance. Even HOA3s, if there are any to that property, should not exceed more than 38 percent of the person’s gross income.

The back end that they call, that’s your total debt‑to‑income ratio. That’s where we go in, look at everything showing on your credit report, plus the mortgage, so credit cards, any other mortgages or anything you have showing, and that should not exceed 43 percent, technically. But with enough variables, the automated system will often let you go up to 50 percent.

The generalized is 43, but there can be some exceptions that may let you get to 50 percent of your total debt‑to‑income ratio.

Matt:  What are some of those variables, Mike?

Mike:  Reserves, your credit scores. The reserves, meaning your assets backing, your credit history, how long you’ve been established. You can also picture…you might get to 50 percent, but 50 percent of a $2,000 a month is not the same thing as 50 percent of $10,000 a month. Your disposable income makes a factor in those as a variable as well.

The next step, if you’re purchasing, is you need to get pre‑qualified or pre‑approved through this process of the application. Pre‑approval or a pre‑qualification is what I just mentioned about. We generally look at the information and say, “Yeah, based upon everything you’ve told me and what’s on your credit report, it looks like you’ll qualify for this mortgage.”

That’s different than a pre‑approval, which means we take all that plus all the support material that will come about. We’ll talk about that in a moment, and send it to underwriting to get a pre‑approval.

We can even do a pre‑approval if you’re purchasing on a to‑be‑determined property, meaning you can come to us saying, “I want to get pre‑approved, but I don’t have a purchased offer in place.” We can do that with many lenders that will allow TBDs, to‑be‑determined properties, to go through the process. That makes you a stronger buyer, having a pre‑approval over a pre‑qual because you’ve already been through the underwriting review.

Now, we just catch it to the property.

Matt:  Good point. That makes a lot of sense. Obviously, the seller is going to look much more favorably on that.

Mike:  Exactly. It’s stronger reason to consider your offer.

Once we have the cursory pre‑approval, we need full documentation. What they mean by full documentation is, we need to see your pay stubs if you’re W2 employed. We need to see the W2s, usually from the previous two years, bank statements for the previous two months, photo ID, tax returns, particularly if you’re self‑employed or receive a lot of income from investments or other sources that may take you higher on a tax bracket.

They want to see all that and see what you write off.

If you’re not a citizen, they want to see the documentation that will allow you the green card, H1, all the different variables in terms of that, so the legal documentation.

If you have a history of a BK but now fall into the category, for instance, that allow you to qualify, they’re going to want to see your discharge information, what was included in the BK.

If you have child support payments or a divorce that often will require copy of the decree, the divorce decree, so all the particulars can be seen and that the underwriting can make sure there’s nothing being hidden that could come up in the future.

Matt:  What is the time frame for BK before to go again?

Mike:  That really is going to be dependent upon the mortgage you’re trying to qualify for. A conventional mortgage after a BK is…What is it? BK is four years. A foreclosure is seven years. You can often qualify for government support programs earlier than that, a VA, an FHA. It gets reduced. We have the ability to marry you to the proper program that you then qualify for.

Underwriting, which is part of what we’re talking about, generally, the initial will take three to five days to have an underwriter review it. Then they come back with, “Everything looks good, but we want to see this additional documentation. These things have to happen.”

For instance, it might be, in some cases, if you have collections, sometimes they make you pay off those collections. That’s where an underwriter comes back and says, “I need these things to happen.”

The other piece in getting qualified, we used to talk and you brought up what’s the time frame, if you’ve had a history of a BK or foreclosure and now you’ve fallen into the window of qualifying, you want to start that process usually about six months ahead of when you actually want to qualify.

Sometimes, you’re prohibited from making an offer before the exact time period by day from when the discharge was or the foreclosure sale date, but you want to begin the process of knowing where you are, what your credit is about six months in advance.

Matt:  Seems reasonable.

Mike:  Overall right now, you can expect a mortgage process that takes about 30 days. Uniquely coming up, August 1, the government is adding into it what they call thread. It has to do with the new restful laws and disclosures and everything that will be attached. The expectation is it will take no less than 45 days starting in August 1 with the implementation of the thread laws and the new disclosure laws.

I’ll talk about that more in the future.

Matt:  I’ll hold the questions.

Mike:  OK, Matt.

Matt:  Mike, as always, great information. We’re part 2 into a 10‑part series. What do we have in store next?

Mike:  My next topic was going to be a very important term that a lot of people don’t understand. That’s LTV, loan‑to‑value ratio.

Matt:  Mike, for those that have questions who want to reach out to you, what’s the best way to get in touch?

Mike:  You can call me here at the office at United Mortgage Financial Group, 480‑503‑3533. Call me direct on my cellphone, 480‑220‑2329, or email me at mike.goblet@, our company initials, umfginc.com.

Matt:  As always, a pleasure, Mike. We’ll look forward to the next segment.

Mike:  Thanks, Matt. I look forward to talking to you in the near future again. Take care.

Matt:  You’re welcome.