4 THINGS TO DO NOT TO DO WHEN BUYING A HOME 1 GATHER DOCUMENTS Keep all original copies of bank statements, pay stubs, and other important financial documents. 2 SAVE MONEY Your financial status will be checked several times during the home loan process. 1 CHANGE OR QUIT JOBS Changing your income level or employment status can alter your qualification status for a mortgage loan. 2 MAKE A BIG PURCHASE Purchasing a new car, boat or furniture can negatively impact your loan qualification status. 3 4 KEEP YOUR ADDRESS CURRENT Continue to make rent or mortgage payments on time. If you are thinking of moving before your loan process is complete, call your lender to make sure your qualification will not be affected. NOTIFY YOUR LOAN OFFICER If you expect to receive a large gift, or any deposits made outside of your typical funds, let your loan officer know. Also call your lender at any time if you expect a depletion of funds to close or have a loss of income during your loan process. 3 4 OVERUSE CREDIT CARDS Your credit score will be checked again right before closing, so it is important to maintain a good credit score until the loan process is complete. You can maintain or improve your credit score by keeping credit card balances at or below 40% of credit limits. GO ON VACATION If at anytime you need to leave the country or go on vacation during your loan process, notify your Lender and your Buyer’s Agent immediately as this may delay your loan qualification or closing.
PRE APPROVAL Negotiation means having leverage. We’ll help you get ready for financing early, meaning that you’ll have a decided advantage over other buyers once you find the home of your dreams. In today’s market, a pre-approval is required when presenting an offer. It is based up information and documentation that have been verified by a lender. It is an indication to the Seller that you are a qualified Buyer. It will also give the seller confidence in your offer. . . PRE-APPROVAL WILL HELP YOU IN THE FOLLOWING WAYS: Leverage your offer, especially in competitive offer situations You can select the best loan package without being under pressure You may need this pre-approval as your ‘Golden Ticket’ to prove to sellers you are an eligible buyer. A pre-approval is based upon information and documentation that has been verified by the broker/lender (vs. a pre-qualification in which the information has not been verified) CHOOSING THE HOME LOAN THAT’S RIGHT FOR YOU FIXED-RATE MORTGAGE A fixed-rate mortgage has an interest rate that will not change during the life of the loan, making it a good option for borrowers who plan to stay in their home long term, especially when interest rates are low. ADJUSTABLE-RATE MORTGAGE An adjustable-rate mortgage, has an interest rate that is fixed, or “locked in”, for several years at the beginning of the loan. The initial interest rate for an ARM loan is usually less than that of a fixed-rate mortgage, allowing a borrower to purchase a larger home, while keeping monthly payments affordable at the beginning of the loan. PORTFOLIO LOAN A portfolio loan is ideal for borrowers looking for a long-term mortgage. This type of loan often does not require private mortgage insurance (PMI) as the lender assumes the default risk. Banks can create a unique loan for borrowers which is able to exceed Fannie Mae and Freddie Mac limits. JUMBO MORTGAGE A jumbo loan is a mortgage that exceeds regulated established loan limits for borrowers with a FICO credit score of 700 or higher, a debt-to-income ratio of 45% or less, and as little as 6 months worth of reserves. FHA LOAN An FHA loan allows buyers to purchase a home with as little as 3.5% down (96.5% financed) and tends to be more lenient on areas such as credit, funds to close, and co-borrowers. Finance your primary residence or obtain an FHA 203(k) rehab loan for a fixer-upper. VA LOAN A VA loan is a safe way for active duty personnel, veterans and disabled veterans to qualify for a mortgage of up to $417,000 with no money down (100% financed). This type of loan requires a funding fee which is added into amount of the loan paid over the life of the mortgage. USDA HOME LOAN A USDA home loan is available to qualified borrowers based on yearly income limits in specific areas a home is located. USDA loans can allow a borrower to finance up to 100% of the value of the home with zero down payment and low private mortgage insurance (PMI), when compared to other government programs. Your lender will be able to talk with you in detail about which loan programs will work best for you!