We work closely with First Time Home Buyers, and folks who are entering the Home Buyer Market for the first time since the “meltdown.” There are many changes in the way we do mortgage loans, and there are some common “speed bumps” that we see folks getting tripped on. So here are our suggestions for making your Easier Mortgage Loan Approvals in 2014.
Get Pre-Approved, Not Pre-Qualified
When we talk to folks who are going out to look for homes, we ask them to go ahead and send us all the documents we need to get their loan in front of an Underwriter. We run our mortgage applicants through the Automated Underwriting Systems, and we KNOW they are qualified to buy a home.
The fact is, most home buyers are making offers using pre-qualification or pre-approval letters, that aren’t worth the paper they are written on. We advise our clients that they don’t need to be like everyone else… Our buyers are armed with an UNDERWRITTEN Conditional Loan Commitment.
Get Documentation To Your Loan Officer Quickly
Getting documentation together for a Mortgage can feel kinda like going on a Scavenger Hunt. We need ALL pages of whatever we’ve asked for, including the page that says Page 8 “Left Blank Intentionally.” If we need you to send us your tax returns, for instance – DON’T WAIT 3 WEEKS TO SEND IT!
Don’t Transfer Cash Around Between 15 Bank Accounts
We are required to verify the funds for the down payment, for the Earnest Money and the Due Diligence Deposits. So if the money has been “pooled” from five different accounts, it’s got to be verified leaving and going to the final destination.
If there are any unusual or extraordinary deposits into your account the deposit will need to be documented. If they cannot be documented the funds will not be given credit in your transaction. This could lead to a denial, because an underwriter suspects a cash advance on a credit card or … If there are any unusual or extraordinary deposits into your account the deposit will need to be documented. If they cannot be documented the funds will not be given credit in your transaction. This could lead to a denial, because an underwriter suspects a cash advance on a credit card or the funds that are otherwise borrowed.
Don’t Spend All Of Your Cash
Do your best NOT to spend all of your reserves during the loan approval process. First Time Home Buyers tend to get very excited during the process , and there is a tendency to want to shop for new furniture, appliances, etc. However, most banks will want current asset statements right before closing.
Don’t Run Up Your Credit Cards
Fannie Mae requires lenders to pull your credit report again, right before closing. This is important to remember, because an additional pull of your credit, can mean lower scores – which we’ve seen create last-minute headaches. Additionally, we are required to verify that any credit inquiries you have in those last few days prior to closing are not really an extension of credit! So don’t buy a sofa, or a refrigerator… or ANYTHING ELSE between the time of loan approval and closing… or you could be jeopardizing your closing date!
Save Up If You Are Not Currently Paying Rent Or A House Payment
A large jump in rental payment to a monthly mortgage payment alarms underwriters for first time home buyers. Those who had lived with family and are attempting to purchase their first home and have been paying no rent should be able to show some savings. Underwriters are looking at Payment Shock, and it will definitely have an impact on your mortgage loan approval.
Do Your First Time Home Buyer Course EARLY
ALL First Time Home Buyers are now required to take a First Time Home Buyer Course, and it can be time-consuming. It’s part of the Dodd Frank legislation that went into play this year. It’s a pain in the rear – but it’s something you have to do. Don’t procrastinate, just do it! Oh by the way – you also have to take the First Time Home Buyer Course if you haven’t owned a home in the past 3 years, so many of our clients are taking it!
First Time Home Buyers know that they can reach us – pretty much anytime, and that we are going to answer their questions, and not think they are silly. We want to help you avoid the mistakes we see so many home buyers in NC make, and we want to make certain that you are getting the benefits you deserve… because in NC, there just aren’t that many places that offer ALL of the NCHFA Programs.
Easier Mortgage Loan Approvals in 2014 mean you need to get all of the documentation to us, keep cash on hand, and don’t use credit cards if you can help it! Call Steve and Eleanor Thorne 919 649 5058 or connect with us on Facebook or Google +