Buying A Home Non-Contingent On The Sale of My Current Home

February 15th, 2020
open house sign

I often get asked to get a potential buyer pre-approved to buy a new home, without the mortgage being contingent on the sale of the current home that they own. While this is possible, it is difficult.

 

GETTING THE CASH FOR THE DOWN PAYMENT ON YOUR NEXT HOUSE

First, you have to have the cash for the down payment and closing costs for the new home without the benefit of the sale of the current home. Then you would have to be able to qualify to carry the debt of both mortgages at the same time. Read the rest of this entry »

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Qualifying For A Mortgage With Rental Income

December 2nd, 2019
keys to a new house

I have clients who are buying a rental property or who are buying a primary residence and already own rental property and think they need to provide a copy of a current lease for the rental property as part of the loan application. But, that is not always the case.

 

The borrower may be able to document rental income by providing tax returns, rather than leases.  In either a purchase or refinance the borrower should have a history of renting property.  If the request is for a refinance, the borrower needs to have owned the property long enough to qualify for this option, typically a 2 year history is needed.

 

If the request is for a loan to purchase a new rental property, then having existing rental property with a 2 year track record income may allow them to use the tax return option.

If the borrower does not have a history of renting the subject property or if the borrower’s tax returns do not reflect the accurate income or expenses, then a mortgage lender may require one of two things: Read the rest of this entry »

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When Is A Mortgage Approval An Approval?

March 24th, 2019
loan approval

When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:

1. Pre-Qualification:

This is done before you make an offer on a home. This is only a loan officer analysis, and supporting financial documents are not required. This is a review of the applicant’s income and debts using standard methods of determining housing and debt ratios to indicate the maximum loan amount for which an applicant would qualify, subject to the satisfactory appraisal, further verifications of income, employment and credit history.  This is the lowest form of analysis you can have done.

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Why get a home inspection and who pays for it?

February 6th, 2019
home inspector

A home inspection protects the buyer. It’s meant to uncover potentially serious issues with the home so that you understand what you’re buying.

In a competitive market, some buyers walk through the home with an inspector before making an offer on the home. This gives them the confidence to formally waive the inspection contingency when they make their offer, possibly putting their offer in a stronger position to be accepted.  However, a home inspection may identify the need for major repairs or builder oversights and minimize unpleasant surprises or unexpected difficulties. Read the rest of this entry »

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How Being an Authorized User on a Credit Card can Help or Hurt You

October 1st, 2018
How being an authorized user can help or hurt you

For most people, your ability to get approved for a mortgage, and the terms you’re offered, depends on your credit report and your history of managing debt responsibly.

Under some circumstances, your credit score can be affected by loans you’re not even responsible for paying.  Read the rest of this entry »

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Automated Underwriting Versus Human Underwriting

August 5th, 2018
approve or reject

When you’re ready to buy a new home, one of the first things you have to do is take steps to get your financing in place. Mortgage approval is based in part on an automated underwriting process. Unless you plan to pay in cash, you need to secure a mortgage loan. It is beneficial to get a pre-approval letter from a mortgage lender before you even make an offer. Having your loan pre-approved can show a seller you are a serious buyer with adequate funds. You can also reduce the risk of the contract falling through.

Lenders typically use one of two underwriting processes for mortgage loans: automated and manual. Understanding the basics of how these types of loan approval work can give you confidence when applying for your mortgage.  Read the rest of this entry »

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Why Do Sellers and Realtors Want Me To Be Pre-Approved?

June 24th, 2018
pre approval approved

Homeownership is a major component of the American dream as it provides you with your own piece of property to put down roots and live your life. You might think the process starts when you first go out hunting for houses or condominiums, but it often begins long before the initial meeting with a realtor when you contact a lender for pre-approval. Homes are major purchases, and it’s understandable that you have to meet certain qualifications before the transaction goes through. Here are a few reasons why the seller and realtor might want you to get pre-approved, as well as an overview of the entire process. Read the rest of this entry »

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Pre-Approval Letter Versus Pre-Qualification Letter: What Is the Difference?

June 3rd, 2018
qualification

When you’re beginning the home-buying process, figuring out what you need to get your mortgage loan can seem complicated. You may even be tempted to find your dream home first before you apply for a mortgage. However, going through the pre-qualification and pre-approval processes at the start of your search can make the entire experience go more smoothly.

 

Before you meet with a lender or mortgage broker, you should have a good understanding of how the loan process works and what you’ll need to provide in your application. This guide covers the basics of loan application, qualification, and approval. Read the rest of this entry »

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