In
addition to being the title of a
catchy Abba tune, “Money Money
Money” is what you should be
thinking about when you are shopping
for your new home.
Time
and again home buyers neglect to get
pre-approved for a mortgage and find
that they either couldn’t qualify
for a certain amount of money, or
during the time it took for them to
get qualified for a mortgage, the
home ended up going to another
buyer.
Let
all of us at
REALESTATE-SANTAMONICA.COM prevent
that from happening to you! We have
a number of mortgage brokers we work
with that are great…for commercial
lending as well as residential.
Currently rates are good…and down
payments are low again, so today
just may be the day you should give
us a call to help you find your
dream home.
Some quick
insights on navigating the mortgage
lanscape
So
you’re ready to go House Hunting…you
have a
Santa Monica Realtor, you have your down
payment, and you’ve put on your
favorite walking shoes…now what?
Well first of all, congratulations!
Today is a wonderful time to buy
real estate. It’s truly a buyers’
market, so now more than at any time
in the past decade, your dollar will
really stretch nice and far. That’s
the good news.
The
challenging news is that because of
a little sub-prime mortgage drama,
obtaining a home loan now lies
somewhere between “difficult” and
“giving up your first child.” But
rest at ease…lenders don’t really
want your kids. ;) And all of us
at SANTAMONICA-REALESTATE.COM are
here to help you. We have three
great useful tips designed to not
only help you get your loan, but
also to make sure your offer looks
as good as possible, so that you’ll
soon be reading articles like this,
in the home of your dreams!
TOP
THREE THINGS YOU NEED TO DO
1.
GET PRE-APPROVED
The
first item of business is to get
pre-approved! Pre-approval is
basically finding out how much house
you can afford, and how you’re going
to
afford it. Time and again home
buyers set their sites on a dream
house only to find out they either
can’t afford the home, or the home
gets sold to another buyer who
was pre-approved and could
therefore move faster into escrow.
To
get pre-approved, first pick a
reputable mortgage lender. If you
don’t have one, ask! At
REALESTATE-SANTAMONICA.COM, we have
a number of lenders we trust…we’re
happy to point you in the right
direction.
Now
that you have a mortgage lender, you
have the person who is going to help
make your home owning dream a
reality. This person is almost as
important as the Realtor. So give
him or her all your financial
information: how much money you
earn, how much is in the bank, how
much you owe, etc.
The
mortgage lender will run your credit
history, so all of this information
will come up anyway, but it’s always
nice to just be upfront with your
lender during the initial
conversation, so that he/she can
begin helping you right from the
start! You will soon know how much
you can comfortably spend on a
home…and you’re that much closer to
going on your first House Hunt!
2.
GO FULL-DOC
The
next item of business is to ask your
mortgage lender to pre-approve you
with full financial documentation.
In the real estate business, we call
this “Full Doc.”
Before the sub-prime mortgage
situation, many mortgages were given
to home buyers based simply on their
credit score (this is called your
FICO score) along with their
earnings statement (your W-2 tax
form). These loan approvals are
commonly known as “stated income”
loans.
Many of the homes going into default
now are owned by buyers who were
“stated income” and banks are
understandably wary about approving
loans this way.
To
make sure you get your loan, and
your perfect house, we are
recommending that you go “Full
Doc.” This process takes a little
longer than just simply getting you
pre-approved with your income,
credit history and debt. Going
full-doc actually requires the
mortgage lender to go through your
tax history for the past two years
to determine your true actual
income.
Why
go “Full Doc”? When you start
writing offers on homes, the listing
agent and the seller will want the
home to go to the most qualified
buyer. They will not want the home
falling out of escrow because the
buyer really couldn’t get financing
based on his/her pay stubs.
Time and again I’ve seen listing
agents and sellers go with offers
that were for less money, but were
from “Full Doc” buyers. So go the
extra mile…it may save you money
when you buy your house!
3.
PROOF OF FUNDS
We’ve saved the easiest tip for
last…show “Proof of Funds.” In
short, “proof of funds” is showing
both the listing agent and the
seller that you truly have the money
on hand that is necessary for the
down payment and the closing costs.
Because many loans now require more
of a down payment than loans of the
recent past, it’s becoming more and
more important to show that the
buyer has available cash.
This “proof of funds” can be
anything from a bank statement to a
retirement account. It’s just
anywhere from which you can draw the
liquid cash available to complete
the transaction.
To
many experienced home buyers reading
this article, this tip can seem
really like a “so what” type of
thing. But the truth is, in today’s
challenging real estate market,
anything you (the buyer) can provide
the seller to show that your offer
is serious, and that you really have
the money, will separate you and
your offer from all the others.
And
as I mentioned before, I have seen
many offers that were for less money
get accepted because the offer
included full documentation, and
proof of funds will only help
strengthen your offer.
So
remember, now more than ever offers
are being accepted from buyers who
may not necessarily have the highest
offer, but from buyers who can close
the deal!
Happy Hunting, and remember that
REALESTATE-SANTAMONICA.COM is just a
click a way. Please
contact us
with any questions and to take
advantage of our network of
professionals in the mortgage
business.