| I recently attended a seminar in which a startling | | | | When you are buying a home, you are telling the bank |
| statistic was thrown out. 47% of the previous months | | | | that you are credit worthy, you have been able to |
| residential sales were by first time homebuyers. As a | | | | properly save the money required for the down |
| banker this is an important statistic. I need to make | | | | payment and closing costs and in some cases you |
| sure that segment of the buyers is served to the best | | | | have the reserves to show additional strength. |
| of my ability. To that end, I want to share some of the | | | | It is very hard to prove that you have saved properly |
| mistakes I've seen during my 22 year mortgage | | | | and have "seasoned funds" if you have recently |
| career made by borrowers/buyers. | | | | transferred or had amounts of money transferred |
| #10 - Do not change jobs | | | | between your own accounts and the accounts of |
| The purchase process is daunting enough as it is, but | | | | others. |
| to compound things and get a new job during the | | | | Your money should be sourced properly and |
| process may just jeopardize your prospects for an | | | | seasoned appropriately or else additional time |
| easy loan approval. Hey, I am not saying you can't | | | | consuming conditions will be added to your application. |
| take a great opportunity I am just saying it can cause | | | | If you absolutely have to move money - keep every |
| issues. | | | | receipt small and large and the statements both with |
| Here are two examples. You have a nice W-2 job | | | | drawls and deposits. |
| paying $75000 a year and you decide the company | | | | #5- Research your monthly payments options |
| net door has a job similar with a smaller base salary | | | | There is no substitution for experience when it comes |
| but offers additional commission and bonus structure | | | | to mortgage banking. I pride myself and a very good |
| that you will likely earn more in the long run. Well an | | | | and very educated mortgage professional. In todays |
| underwriter does not know if the job will work or not | | | | mortgage market it is more important than ever to be |
| and cannot forecast earnings for you. She would likely | | | | technically proficient in all forms of conventional, |
| be required to qualify you on only the base salary as | | | | portfolio and government lending. |
| there is no history of the commission or bonus income. | | | | Once you do find you mortgage professional you |
| In another example you are a CFO for a plastics | | | | need to consider your payment obligations versus the |
| company and are hired away by another firm in | | | | home and sales prices that will come with them. |
| another industry. Provided base salary and | | | | While we in lending qualify using your gross wages |
| compensation are guaranteed there would likely be no | | | | you are paying with your net income every month. |
| underwriting concerns. | | | | Even though you may qualify for a mortgage does not |
| The best solution is to delay any job change until after | | | | mean it makes financial sense. It is always important to |
| your financing is complete. | | | | heavily weigh financing and the tools available for |
| #9 - Do always file tax returns and keep copies | | | | down payment assistance and lower start rates. |
| You'd think it would go without saying but many out | | | | #4- Do the math |
| there still don't file tax returns regularly. Taxes are due | | | | Know what you are getting into. Read your disclosures |
| in April and if you delay filing you must have filed an | | | | we send them to you for a reason. Know what your |
| extension prior to applying for a loan. | | | | mortgage terms are, how must it all costs, what your |
| Delinquent tax filings will always complicate and almost | | | | payments are. |
| eliminate any form of reasonable financing out there. | | | | #3-Do choose a bank or verified direct lender |
| So if you are going to buy a house, you need to have | | | | Although I have been a mortgage broker in my career |
| filed your tax returns and up to date. | | | | I have to say that dealing with a direct lender and/or |
| #8 - Do keep your monthly mortgage statements and | | | | bank is today the best way to go. The shear truth is |
| other monthly statements for any and all debits of | | | | these institutions are better able to adapt to the ever |
| credits. | | | | changing lending atmosphere. That is not to say there |
| I am a big fan of keeping documentation from any | | | | are not good brokers, you just don't have time to |
| financial transaction where my money is involved. Well | | | | figure out who is good or not. |
| I probably keep too much, but if you are applying for a | | | | #2-Do make sure you are ready for the commitment |
| home loan, there are a whole host of reasons why | | | | of ownership |
| you should have six months of bank statements, bills | | | | Let's face it, you are thinking about settling into a home, |
| accounts statements etc. You should also have at | | | | investment, and an anchor. Houses are a look like pets. |
| least 3 years tax returns on hand. In the mortgage | | | | You can't just leave them. You have made a |
| business we often need support, proof, and | | | | commitment. Are you thinking about moving to China |
| documentation to prove many things in a borrower's | | | | for that job or back to Kansas, to be with Dad? If you |
| financial picture. Having these documents handy will | | | | are contemplating these things...it's not time to buy. |
| save you time and frustration if you have them out | | | | #1- Do Relax |
| and available earlier. | | | | If you are lucky enough to find the right mortgage |
| #7 - Don't co-sign for anyone | | | | lender he or she will instill the confidence that will help |
| It is certainly possible you have the wherewithal to | | | | get through the emotional rollercoaster of buying a |
| co-sign for another person or family member. I cannot | | | | home. It is the biggest financial transaction you will be |
| share with you how many times I've seen this ruin | | | | part of and undoubtedly that strike fear in many. I am |
| someone's credit scores. If at all possible avoid doing | | | | here to tell you it's all going to be OK. If it is meant to |
| this ever. If you sign for someone else be prepared to | | | | be it will be. If you've done what I've said above you'll |
| have to qualify with those additional payments as if | | | | be fine. |
| they were your own debts. | | | | And congratulations on your new home! |
| #6 - Don't move money around in accounts | | | | |