Make Your Home Loan Closing a Breeze
Buying a new home, whether it’s your first or your fiftieth, is often both an exciting and stressful process. There are things you can do as a homebuyer that will decrease the stress side of the equation significantly so that when you find that perfect home, it can be smooth sailing through the closing process.
- Start with a mortgage loan prequalification: Financing is pivotal to purchasing a home for most homebuyers. Serious buyers should become prequalified for a home loan before they begin shopping. Being preapproved means the sellers will take your offer seriously while helping you clarify what you can and cannot afford. Serious changes like a change of job or default on bills during the loan making process can still jeopardize you loan – just report them to your loan officer right away to minimize harm.
- Have your down payment ready: Seldom does it work out for buyers who shop for a home before they have their down payment saved. It is tough to pull together large sums of money in a short time. Certain prepayments and other financial settlements are due at closing that do not count towards a home’s down payment so make sure you are financially prepared.
- Debt ratio and credit profile: Now is the time to resolve any outstanding credit profile problems. Consolidate debt, if necessary, to decrease monthly payments and pay off what you can. Generally speaking, your monthly expenses cannot exceed 45% of your monthly income.
- Don’t write-off your buying power: Business owners and those who are self-employed are able to write-off business expenses to minimize their taxable income. Keep in mind that excessive tax write-offs will lower your purchasing power since it plays a critical factor in your debt to income ratio.
- Don’t skimp on home inspections: A thorough home inspection including a separate termite and lead (if applicable) inspection may save you thousands in unexpected costs. Be sure to make you offer contingent upon findings. The buyer has the right to ask the seller to repair any problems with the home or adjust the purchase price pursuant to inspection findings. In extreme cases, inspections save homebuyers from the nightmare of purchasing a home in severe disrepair.
- Be prepared to discuss in detail these additional issues with your loan officer:
- Self-employment of two years or less
- The origin of and terms of any gift money or secured loans for down payment
- Any debts of which you are a co-signer
- Previous short-sales, foreclosures or bankruptcy in the past seven years
- Debt related to the IRS or spousal alimony/child support
- A new job including part-time work
- Deferred student loans
The good news is that whether you have a high credit score with a solid payment history or you lost a home through foreclosure or short-sale, an experienced, customer-focused loan officer is likely to have a loan product that will work for you as long as you’ve done your part in preparing to enter the market. Happy home hunting!
Posted on October 28, 2015, in Blog and tagged FHA loan, home mortgage, Las Vegas home loan, mortgage loan, private home loans, second chance loans, Sydnee Johnson PML. Bookmark the permalink. Leave a comment.