How a letter led to securing home loan

Mortgage broker: John Holmgren. Purchase price: $270,000 condo in Alameda.

Loan amount: $185,000. Loan terms: 30-year fixed at 3.75 percent with no points. Backstory: Holmgren’s client was a very young man with a very diverse employment history. He had served in the U.S. Navy, then worked for a counseling agency while he studied psychology at night toward a career in that field, and finally took a job as a Starbuck’s store manager. This last position had been in place just three months when he contacted Holmgren about being preapproved for home financing.

While the client was a salaried employee, his ability to qualify was complicated by the fact that current underwriting standards typically require at least a year’s work in order for that employment to be considered stable enough to warrant the extension of home mortgage financing. The good news and bad news was the buyer was receiving his down payment as a gift from his father. This helped by covering a substantial percentage of the property price. But it detracted because the buyer had not accumulated any of his own funds toward the purchase.

To position this home buyer in a way that his underwriter would be comfortable with the durability of the buyer’s income stream, Holm- gren asked the client to explain in great detail every type of job he had held. It turned out that he had worked in his family’s fast food restaurants when he was in high school and college and, even while he was working in the counseling agency, had worked part time on some occasions in those establishments. Holmgren had the buyer write a detailed letter explaining his work history in the food service industry, tying the skill set required in that field with his counseling work and education where appropriate to present the picture of someone who could be relied upon to remain employed.

The loan was approved without further documentation or explanations required and the buyer enjoyed a smooth close.