Possible Financing Issues, Buyers Beware!

Possible Financing Issues

                              Buyers Beware!!

Did you know that 30% of all purchase applications are rejected?  This is according to the Mortgage Bankers Association.  Here are some pitfalls buyers might want to review BEFORE making application!

Bozeman buyersIncome issues:

·         Is your spouses credit good as well?  Are they going to be able to use their income.

·         Have you changed careers lately?  A complete change will require some time to verify you can make it in this field.

·         Have you started your own business or become freelance?  This requires a minimum of two years tax returns to verify income, and sometimes more stringent requirements.

Bozeman Real EstateDebt to Income Rations:

·         Bonus time and overtime are handled differently, check with your lender!

·         Cash wages are impossible to include in your income unless you report that cash income on your tax returns.

·         Rental income will be included at 75% usually, if you have listed it on your tax returns, or have a lease signed, and sometimes only if you have previously been a landlord!  Check your lenders requirements.

Real estate in BozemanCredit Score:

·         Usually must have a 620 to 660 score

·         Collections and judgments will cause you heartburn!

Bozeman Real EstateProperty appraisal:

·         Are there foreclosures and short sales near your home?  They may be used as comparables and could pull the value of the home you are purchasing down.

·         Even if it appraises, the appraiser can list a defect that the lender will require repairing prior to closing, like a new roof!

Real estate Bozeman MontanaComplete and Accurate Application:

·         It should go unsaid, but an application should have EVERY line filled in.

·         It is usually not anyone that knows you reviewing your application for final approval, don’t assume that your personal banker will do the review and knows you, fill it in for a stranger!

 

Hopefully these tools will prepare you for applying for a new mortgage.  It may make a difference in whether or not you are approved and how much you are approved for!  This is your first step in the home buying process and one of the most important.  Take your time and do it right!

If you are in the market to purchase one of our Bozeman Montana homes, call or email, I would be happy to help you start looking!

Comment balloon 4 commentsJenifer Lower • October 29 2011 01:46PM

Comments

An experienced licensed mortgage professional would  make sure these items are covered before they submit the loan for approval. I guess there must still be a number of loan orognators that throw loans apps up against the wall and hope they stick. In this day and time, you need to know your stuff. 

Posted by JoAnn Moore, Home Loans in Delaware (The Mortgage Market of Delaware) almost 7 years ago

Nice article Jenifer! With all the things you mentioned it just goes to show why consumers should pick a good Realtor like yourself to represent them. We know a lot of things and can help them and advise them about the pitfalls you mentioned and more. If someone chooses you to represent them..they will be fortunate...Wayne

Posted by Wayne Goss, THE MYSTERY MAN (Keller Williams) almost 7 years ago

I have run into people who have cash wages they don't report and are then surprised when the lender won't count them.  Buyers should plan for a purchase by documenting & claiming that income.

Posted by Maureen Fukumoto, Maureen (Help-U-Sell Realty Pro) almost 7 years ago

JoAnn, you are correct, an experienced mortgage lender would handle this situation differently.  I'm also in hopes of helping consumers understand a little better and repair or be aware of issues before they get to you, or me for that matter!

 

Wayne,  aaahhhh shucks!  Thanks for dropping by.  we do go a long ways in giving helpful direction.  I wish there were more of us that were educated ourselves before they got into the business!

 

Maureen, funny how folks think they can hide thier income, and then use it for a loan.  They really have to document it for nearly 2 years.

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) almost 7 years ago

Participate