Choosing the Right Lender & Getting Pre-Approved: Part 3 with Holly Cross

In this episode of Your Favorite Mortgage Guy Podcast, host Steve Rockefeller sits down with seasoned mortgage expert Holly Cross from CMG Home Loans to break down the biggest questions and misconceptions about home loans. With 20 years of experience, Holly shares why having a true mortgage advisor—not just a lender—is critical when navigating one of the biggest financial decisions of your life. They cover everything from pre-approvals vs. pre-qualifications, the truth about grants and first-time homebuyer programs, to what really impacts your loan options—like student loans, childcare expenses, and being self-employed. Whether you're buying your first home or just want to be better informed, this episode is packed with real-world insights and advice you won't get from a website.

Episode Transcript

(00:02):
podcastthe show that brings you timely
insightsessential tips and everything
youneed to know about mortgages it's
timeto get informed get inspired and
get moving with your host Steve
Rockefellerbecause here your favorite
mortgageguy has your back hey guys it's
your favorite mortgage guy Steve
Rockefellerhere with another edition of
theYour Favorite Mortgage Guy podcast

(00:25):
todayI've got Holly Cross with CMG Home
Loansyou want to know something holl's
got20 years of experience in the
mortgage business she's helped
first-timehome buyers mid-level home
buyershigh-end buyers people that are
lookingto build a house people that are
lookingto do construction loans people
thathave bad credit good credit no

(00:46):
moneya lot of money she's helped them
allin her 20 years of experience holly
welcomethank you Steve so listen you
knowlet's just jump right into how do I
choosethe right lender and the right
mortgageadvisor to help me what What do
youthink um I think the word you just
mentionedadvisor is probably one of the
biggestum parts of that obviously you

(01:09):
cango online nowadays and just fill out
an application and print out a
pre-qualificationletter um that may not
evenbe worth the paper the inks on so
youmean so wait so you mean that if
it'sSunday at 11 o'clock in the morning
andI go to my favorite credit union
websiteand I fill out an application
andit just spits out a pre-approval

(01:30):
letter that's not worth anything
absolutely not no um Okay
ineed to know more about that yeah and
we'veall ran into situations where
someonethinks they're pre-qualified on
aSunday at 11 a.m correct yes they have
nevertalked to an actual human being um
andthat's very disappointing for a
clientI think to then find out that

(01:51):
they'rereally not qualified um so
obviouslyspeaking to somebody who's
availableadvises you puts together a
fewdifferent options walks you through
theprocess lets you know what your cash
toclose and payment's going to be
prettyearly in the transaction um is
very important

(02:12):
ican't stand it when people go to the
creditunions at 11 o'clock on a Sunday
becausewhen I answer my phone and you
answeryour phone we're looking at their
creditright we're looking at the stuff
we'reactually listening to what they
say right and
andincome people will just type in what
theythink their income is and we dig a
littledeeper with those questions to

(02:33):
make sure that you are actually
qualifiedyeah yeah so let's come back
to the advisor
so20 years of experience you've got as
an
advisorwhen you got into the mortgage
businessyou didn't just know how to to
tolend money you had to learn the
aspectseverything from income to credit

(02:54):
to balances and and the mortgage
industryhas evolved because when I got
intothe mortgage business there were no
cell phones
therewere no fax machines they were
justinvented and so so you had your
companywas just getting fax machines
creditreports were delivered to you by
thecredit agency now everything's right

(03:16):
therein front of you on your computer
screenor your tablet or your phone so
pickingthe right mortgage advisor why
is that important to a consumer
becausethey're going to walk you
throughthe process make sure that you
aregetting the right loan for your
scenarioand the personal attention that
youneed and that you understand what
you'regetting into i think it's very

(03:37):
importantit's one of the biggest
purchasesof your life why not have
somebodywalk you through and explain
everythingvery thoroughly it's very
important to me that my clients
understandexactly what's happening and
thenalso have the opportunity to ask
allthe questions they need to to ask
sowhat I'm hearing you say is if I

(03:58):
Googlehow do I buy a home I shouldn't
followthose steps right we don't want
tofollow those steps that we get online
becauseit's easy you can just print
whateveryou want but that's not going
tobe the reality of when you're in the
realestate agent's car going and
looking at
housesyou need to be able to buy a
housewith confidence right yes and
that'swhy a good mortgage advisor will
giveyou that confidence yes all right

(04:21):
so you know clients oftent times
willask questions like "Can I qualify
for a grant
whatis a first-time home buyer what
typeof loan should I get so let's talk
about a grant a grant is really
somethingthat is for somebody who

(04:43):
normally would not be able to do
anythingthat means they have to have
lowertier income they have to go
throughthe grant process which is
application it's like a credit
applicationthey have to go through the
educationpiece they have to go through
sometimesclasses at night and it
doesn'tmean they're going to get the
grantand grants are only given by
localities and state facilities

(05:06):
andyou won't know how much of a grant
you'regoing to get until after they
approveyou for that grant so if it
takesa year to get a grant in many
casesthey say "Okay you're going to get
$30,000 but you only qualify for
$150,000house are there any $150,000
housesout there right now?" No not

(05:27):
reallyin our market yeah I think the
grantsare great Steve and I think they
canbe a great tool i think you just
haveto understand sometimes with grants
thatnothing's free right so the rates
usuallya little higher like you said
youare going to go through quite a bit
ofwork trying to obtain the grant you
mightget to the last minute and there's

(05:48):
no grant money left um it's a
greatavenue or tool but it's not
always perfect okay
sofirst-time home buyer that's just a
connotationright that's like some
excitingterm out there um it doesn't
meanfree it just means okay you're

(06:09):
first-timehome buyer is there always a
benefitto that or is that just the term
thatlenders use there's not always a
benefitthat's just the term and I think
toqualify for some of these first-time
homebuyer programs you or some of these
special programs you have to be
considereda first-time home buyer but
withthose programs comes stricter

(06:30):
guidelines higher interest rates
sometimesso it's it's a trade-off right
yeahbecause nothing's free nothing's
free what is the difference
between the four
majorloans out there va FHA USDA and
conventionalso I would say um obviously

(06:53):
thehardest one to get or qualify for
wouldbe a conventional loan usually
thatrequires some money down um and a
littlestricter guidelines with credit
scoreand whatnot and then the other
threeloan options would be um VA FHA
andUSDA those are all government um I
guessyou could say backed loans va is
umguaranteed by the VA and FHA is

(07:16):
insuredum and those ones offer a few
differentum options usually lower
interestrates um and of course for the
VAloan you have to have served in one
ofthe branches of the US armed forces
okayso one thing that um that I've
learnedthat with clients is and and
thisis recent is that everybody out

(07:37):
therenowadays that has gone to school
hasstudent debt so I know in September
of
24the government had been notifying all
thesepeople that had their student
loansdeferred uh or were in forbearance
thattheir loans were going to start the
repaymentwas going to start in June of
thisyear and those people we've had a

(08:01):
coupleof them already that have said "I
nobodytold me the response that I had
becauseone of the ones I'm dealing with
rightnow she her credit score dropped
significantlycuz she was behind."
And you know I I kind of nicely
saidfor sure you didn't think this was
goingto be forever right you knew that
theywere going to come through at some
pointand it's been all over the news

(08:24):
thegovernment emailed the government
actuallyhad voice recorded messages
that went out to these people
andyou're responsible for your own
studentdebt right i mean you you sign
thenote just like you sign a car note
haveyou seen the impact yet of some of
thesenew changes that are coming i have
noti have obviously every time I've

(08:45):
pulledsomeone's credit report where
theyhave deferred student loans let
themknow and make sure they're aware
thatthey're going to be coming out of
defermentum as you know Steve we are
allwe've always been required to factor
ina hypothetical payment anyway um just
makingsure that they can qualify so I'm
theconsumer but I don't have to make a

(09:06):
paymentwhat do you mean you know and
thenyou say well you got $60,000 in
studentloans what you're saying is they
haveto take that that value of the loan
timeswhatever percentage and there's a
hypotheticalpayment correct and that
canbe damaging in the qualification
right correct yes but obviously

(09:27):
especiallyif you have government loans
you'regetting a a government mortgage
sayan FHA loan they obviously want to
makesure that you can pay back right
yourstudent loans cuz which one are you
goingto pick when the time comes and
youcan't make your housing payment to
FHyou know and then you default on your
FHAloan and then you also have these
governmentstudent loans so so VA loans

(09:50):
here'sanother myth that most people
don't know
aboutit's that hidden deal killer it's
calledchild care and you know the thing
isis that often times as loan officers
wetend to forget to ask hey how many
kidsdo you have and how old are they
eventhough it's right there on the
applicationwe just breeze through the

(10:11):
applicationand then we find out they
haveyou know two five year olds or a
coupleof kids under eight years old and
child care is not cheap
wowi mean I hear stories of people that
arepaying $1,500 to $2,000 a month
that'sa deal killer right yes so what
wehave to do is we have to navigate
aroundthat i mean that's that's all we

(10:32):
can
doall right what other question do you
thinkthat you get what's what's one of
the big
onesin with qu with clients with
qualifyingyeah like I know that one of
thequestions that I got yesterday which
was kind of interesting
waswhat if I want to add my um daughter

(10:56):
on the loan can I do that
andit was hard for me to say no because
youknow obviously I want to say yes but
sheprefaced it with my daughter doesn't
havethe best of credit is there a way
aroundlike maybe if the buyer qualifies
but they still want to add their
daughterto help them build credit is
theresomething else we can do i get
thatquestion a lot too Steve you know

(11:18):
canI add my wife to use her credit
scorebut not but she doesn't have any
incomeor can I not can I use her income
butnot her credit score um I think
wouldthis be a nonoccupant co- borrower
inyour situation yeah so that's a
littledifferent um but that's a great
questionwhat you just said so if I want
toadd my wife she's going to live in
thehouse she has no income is that

(11:39):
goingto benefit me on the interest rate
becausemaybe I've got a 620 and she's
gota 780 right so we always go with the
lowerof the two scores okay and then we
haveto use all of the information so
we'dhave to include or not include
incomeif there is any or losses and
alsodebts so if your wife has a great
creditscore but a ton of debt we'd have

(12:00):
tothen add that to the loan application
soit could be detrimental to the file
correctyou can't pick and choose well
you just said something
um losses and you know everybody
nowadayshas is trying to figure out a
wayto navigate the small business
because most of the time small
businessesare just passroughs so

(12:22):
whetherthey're a nail technician or
massage therapist or they
sellvitamins I don't know Tupperware um
childcare provider dog walker can that
incomebe used yes but we have to
calculateit a specific way and I think
thisgoes back to a question about

(12:43):
pre-qualifyingand preapproved you know
it'svery easy to analyze someone's
documentsand income when they're
salaried or you know military or
whateverbut when you're self-employed
wedo have to dig a little deeper and
usuallyrequire copies of your tax
returnsfor the last two years to fully
calculateyour income it's not as cut
anddry as as what you think it may be

(13:05):
whichis what you're making yeah right
sothe big one that's come up in the
lastcouple years is Door Dash Uber that
kindof stuff we see that a lot that's a
cashbusiness but it's a 1099 business
soif you're writing off your vehicle
you'rewriting off all that stuff just
becauseyou're making the money doesn't
meanyou're making the money right
becausewe're going to look at it a
littledifferently well guys listen we

(13:26):
hopethat we have demystified the worst
ofthe worst of getting a loan it's
reallyeasy but you know what it starts
witha phone call to me or to Holly and
thatphone call is pretty easy you know
why because if you don't ask the
questionyou won't know the answer don't
go out to the internet and read
somethingbecause remember once you
startapplying for something on the

(13:48):
internetyou are going to be bombarded
becausethe internet is designed to sell
leadsto realtors to lenders to you name
it don't do that call your local
mortgageadvisor call me your favorite
mortgageguy call Holly whatever you got
todo just get preapproved first because
arealtor is not going to put you in

(14:10):
theircar so thanks again for watching
i'mSteve Rockefeller have a great day
thanksfor tuning in make sure to follow
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LinkedInand Instagram have questions or
readyto take the next step reach out at
steveloans.com or call
757301-9776we'll catch you next time