First Stop 4 Home Loans

We just completed another successful first time buyer seminar this past Thursday night.  That was quite the night of storms — thought we might be talking to a small, non-existent audience, but we got lucky and people “weathered” the storm!  I hope you all did too and thanks to those of you who did make the trek!

Every month, on the third Thursday, we perform an exciting light show with music and dance — okay, not really.  But we do present an evening of information so you can learn what you need to know before you get out and look at homes.  Please join us from 6:30-8 pm at the Cornerstone Mortgage office located in Burnsville at 436 Gateway Blvd. 

Steve Howe from Re/Max, and I, will walk you through the homebuying process starting with the first step … pre-approval.  That’s the step of getting your financing set up so you know you can actually purchase a home if you find one.  This is CRUCIAL in today’s market since, as a loan officer, I am seeing changes constantly on what investors are requiring to get a loan.  Come learn what the new changes are and come find out about the special programs you may be eligible for to help you afford your new home.

Steve will explain the home purchasing process and what you can expect from a Realtor.  He makes this process simple and easy to understand; whereas I just confuse you!  Just kidding.  Making sure you’re still reading!  He specializes in in helping first time buyers which is important since your needs are vastly different than a current homeowner.

Anyway, we’d love to have you at the seminar, whether it’s in July or our future classes.  And speaking of classes — this is NOT the Homestretch class that is required to qualify for the first time buyer programs.  You can see this as the Cliff Notes, but with additional information on the special programs that Homestretch doesn’t delve into.

Please RSVP with Cheryl to let us know how many spaces to save.  Can’t wait to meet you!  Oh and one pre-requisite … come with questions!

Every third Thursday of the month we are happy to offer you a free seminar* to learn more about the First Time Homebuyer Process.  Join us on Thursday, the 17th, 6:30-7:30 pm at the Cornerstone Mortgage office located at 436 Gateway Blvd in Burnsville.

From the starting point of getting pre-approved and all that entails to going to closing and signing a bunch of papers to officially dub you a First Time Home OWNER!  We are here to educate, not sell you something.  Steve Howe, Realtor with the Minnesota Real Estate Team, and I will also talk about purchase agreements, the many down payment assistance programs and answer ANY questions you have. Ultimately, we hope you will leave the seminar with a greater understanding of buying a home.

If you’d like to attend, please call Cheryl (952-808-0042) or email her to get your name on the list.  Bring any questions you have so we can address those throughout the seminar or at the end.  We look forward to seeing you this week!

*This is NOT Homestretch.  Go to www.HOCMN.org to register for this 8-hour class.

With so many foreclosures in the marketplace, you are bound to purchase one.  Thing about foreclosures is the process can be a little trying.  There are a few reasons for this.  First, you’re dealing with a bank, so timeliness is not always a priority on their part.  You may not get a decision on your offer as quickly as you’d like.  Sometimes, banks will set a date purchase agreements are due requesting the “highest and best” offers.  This means they’re looking for multiple offers and in this instance, they may have originally priced the home lower than market to create this frenzy.  It is what it is and if it’s a home you want, you have to play by their rules.

Will this Close?

Another thing you can expect with a foreclosure is an “as-is” addendum.  This means that you are buying the house without a seller’s disclosure and in most instances, the bank won’t fix anything if there are any issues with your inspection or appraisal.  Oh, and speaking of inspections … just because it’s sold as-is does not mean you can’t get one or make your offer contingent on one.  It’s still highly recommended.  Let me give credit to some banks out there.  Some WILL do repairs which can be beneficial to you.  Also, just because it’s bank-owned doesn’t mean you can’t ask the bank to cover some or all of your costs.  A good Realtor will be able to advise you on this aspect of your purchase agreement.

The reason a bank completes an as-is addendum, is they have no knowledge of the home.  They’ve never lived there and I’d be shocked if anyone from the bank has even been to the house.  So, if there was previous water damage, storm damage or anything that may negatively affect the home, they won’t know about it.  Typically, there is no personal property offered in these deals.  For instance, if the kitchen still has the appliances, they cannot guarantee they will be in the home when it transfers to you.  If they happen to be there when you move in — woohoo — extra bonus!

When working with the banks on these foreclosures, you can expect, in most cases, that the bank will require you to close with a title company they have chosen.  The bank will run all their transactions through this title company for ease and for familiarity.  Typically, the bank will offer to pay your owner’s title policy.  So you know, the bank may require you to close with their chosen company, though by law, you technically CAN choose your own company.  I would highly recommend you get a solid recommendation from your agent or lender.  Many title companies will adjust their fees to compete with the bank’s company.  I deal with title companies all the time and I know who performs and who could use a little work.  Those that can use a little work are not all bad.  There may be delays in getting paperwork or closing scheduled, but it eventually gets done. 

Sometimes, it doesn’t.  Here’s what happened that should have never happened.  A recent transaction I had didn’t close on it’s desired close date and then didn’t close a week later.  It wasn’t the client’s fault.  It wasn’t due to financing — package and funds were there.  It wasn’t due to the Realtors not doing their job — they did all they could.  It ALL had to do with the title company.  This “title company” had no presence in MN.  The people were slow to answer emails and rarely answered phones.  They didn’t meet with clients, but sent a notary — very impersonal.  Not only that, the title work was “outsourced” which made matters worse.

Needless to say, we needed some paperwork, which took a few weeks to get after persistent emails and calls.  We needed the closing to be scheduled so we knew when to date the closing paperwork and the buyers knew when to be available — never was set.  Since we finally had the necessary paperwork, the agents and client set a date; we sent the package and wired funds.  It’s typical for the title company to provide a HUD to the lender for approval.  The HUD is the itemization of the settlement charges.  We spent the morning of the ”rescheduled” closing date burning the phones up to the closer, as well as emailing.  Nothing.  Right after lunch, we requested the wire be sent back since there was no response or HUD.  Low and behold … a response with a request to give them some time as they are working on the HUD.  That was it, the last communication.  I am not sure why an extra week wasn’t enough time.  Come Monday we still didn’t have the wire back. 

Seems pretty bad, huh?  It is unacceptable to have such poor communication.  In the 16 years I have originated loans, I have NEVER experienced such disregard to all the people involved.  If you think the above is bad … the following is worse.  The family moved from their apartment, had their lives in a truck, their kids hours away with family and no place to go expecting to close on the date set in the purchase agreement.   So, that week the buyers had to pay to store their stuff and live in a hotel, with many days of frustration and uncertainty.  Who wants to go through this?  They didn’t deserve this.  The day the funds were at the title company, we waited … and waited … and the return calls never happened nor did the HUD arrive.  The buyers moved on and are now renting month to month.  They had to, had to provide a home for their children and stop waiting for a closing that wasn’t happening.  Why?  Because a title company couldn’t get their ducks in a row, didn’t have the same customer-focus as the others involved and didn’t have the desire to make it happen.

How could this have been prevented?  Bucking the system with the bank and choosing their own title company.  Does this mean everything would have been rosy?  Not necessarily, but it would have meant familiarity by those who matter — the buyers, agents and mortgage company.  It would  have meant the personal touch of having a person to talk to, someone to depend on and someone to sit across from who knows the programs and can explain the paperwork — not just a notary to stamp after each signature — which is how they planned to handle the signing.  These people could have saved hundreds, not to mention all the time lost in work, on the phone and away from their children.  How do they get that back?  How can they be compensated for what they lost?  They can’t and that is a shame.

Working with the right people doesn’t just mean your Realtor and loan officer.  EVERYONE involved in the transaction needs to have the same goals in mind … YOUR goals in mind.  This obviously includes the title company.  As you can see, they can make or break a transaction — a preventable situation.  I am hopeful that this family can get their lives back in order and I truly hope they can trust again to take that magical step of owning their first home.  They actually gave the title company one more shot and … of course, they still didn’t close.   I pray homeownership happens, as everyone deserves to own a home and more importantly, everyone deserves to be treated fairly, like they matter and be given the common courtesy of great communication.

Believe me; I ask myself this daily.  You hear that you need 20% down to get financing or sterling credit.  And though these are GREAT attributes, they aren’t a guarantee that you will get a mortgage OR that you won’t have to go through a few hurdles.  It used to be so easy to get financing.  It wasn’t that we just handed money out to anyone, though there were people who did and look where that got us.  It’s not just them; it’s the lenders that accepted high risk buyers and did deals that should have never been done.  This is neither here nor there.  Right now, we need to focus on what the rules or guidelines are NOW, not what they used to be.  Those days are gone my friends.

Let’s start with the simplest issue I see today and the piece that has had the most changes — CREDIT.  Let’s talk about credit scores first.  Way back when, credit scores mattered; but they weren’t as much of a guage as they are now.  What I mean by that is we were able to create credit for people if they had lower scores or if they had NO scores.  It may have been acceptable to help someone who had lower scores, let’s say 560, if we could show clean credit on alternative sources such as insurance, utilities, rent, cell bills, etc — this is how we “created” credit.  And, if there was a clean credit history in the last 12 months, this deal could have probably worked.  Now, the line is drawn.  For the most part, you will need scores AND the middle of the 3 scores (most of us have a score from each bureau – Experian, Equifax and TransUnion) must be at least 620 or higher.  This is NOW.  I am guessing in the next few months, or sooner, most investors will be at 640, as some have already taken that leap.

Still referring to credit, you now need at least THREE tradelines (an item of credit on your credit report) AND they each must have 12 months’ history.  Plus, these lines need to be current.  Let’s say you haven’t done anything with your credit for a few years because you worked abroad.  You may have great credit scores because, before you left, you did a good job managing your credit.  Unfortunately, most, if not all, of your tradelines will be older in terms of the last active date.  This is one of the things that’s catching people and making it so they can’t get a loan.  It’s a shame really because you can tell they’re good at making payments and are responsible.  Thing is, the score isn’t a true representation of their credit since it doesn’t have current information reporting.  There is one exception to this rule, as of now.  The 3 main first time buyer programs, CityLiving, Dakota County Bond and MN Housing, in conjunction with an FHA loan, will allow less than 3 tradelines and less than the 12 month history.  If there is a score, it must still be over 620, however.  With the first time programs, we would work on creating credit and we WOULD need to find 3 items of credit to have added to our credit report — again, car insurance, utilities, layaway plans, healthclub memberships, utilities, etc., are all items we can use to create your history.  And by the way, this will NOT help your score as we do this on our credit report we pulled.  This does not get reported to the credit bureaus.

Another fun credit change that is COMING, and fast — Fannie Mae is requiring that lenders verify the borrower’s credit prior to closing.  It’s under the new Loan Quality Initiative.   Some Minnesota lenders have already put this in motion.  The interpretation of pulling credit prior to closing is within 48 hours of closing.  So, in my article, “Things Not to Do”, you learned that while in the loan process, don’t open new accounts or close accounts.  Well, this just became CRUCIAL to follow.  If you open a new account, just have a creditor check your credit for a possible new account, increase balances on what you owe, or anything … your approved, ready-to-go-to-closing loan could be un-approved.  For instance, the credit pull or increase in balances, could have dropped your score under what your approval requires.  Or, the new debt now makes it so your ratios are too high for qualifying.  If you want to deal with stress or the possibility of not closing on a home, then feel free to mess with your credit.  My advice is far different and will be quite bold.  If you want your loan to stay approved, DO NOT, under any circumstances, open new credit, consider opening new credit so your credit has to be pulled by another lender or increase your balances on your current debts.  This could make or break whether you close on your home or not.  There is no first time buyer exception to this either, so my advice stands in all circumstances — Just Don’t!

What else is making it hard to get financing?  How about qualifying ratios?  This is how a lender determines what you qualify for.  We use your gross monthly income and run some calculations.  In most cases, the “debt ratio” is the most common one for us to look at.  We want to make sure your new house payment PLUS all other obligations, does not exceed the program guidelines.  Essentially, for most loans, that means not spending more than 45% of your income toward the new housepayment and your other debts.  PMI companies (private mortgage insurance) have put their guidelines on this too.  Many PMI companies require a ratio of 41% or less.  Even though you may have an approval through an automated underwriting system, the PMI company could trump it and disapprove your loan due to excessive ratios.  I can remember the “days” when we saw ratios at 65%.  Now, was that a good underwriting decision?  Maybe, maybe not.  For an underwriter to make this call, the borrower must have excessive compensating factors, such as plenty of money left over after closing, good credit scores as well as good job stability.

This is a small sampling of the changes in the loan industry.  They are a few of the guideline changes that have impacted much of the business I do.  So, in answer to the blog’s title question … yes, many people can get loans.  No, you don’t need 20% down and sterling credit.  Fortunately, FHA is a great loan requiring only 3.5% down and more leniency with credit.  FHA also allows us to go a little higher in ratios and doesn’t limit us to the 45%.  I am not saying we can go over that just willy nilly.  That’s not the case.  We can go a little higher if, and only if, there are good compensating factors.  And I bet you didn’t know this (well, unless you read the blog), City Living and Dakota Bond programs ONLY allow FHA loans or VA, no conventional.  And don’t forget FHA and their guidelines in regards to disputed accounts.  This just adds another item on the checklist of things we have to watch for in order to make sure you can get approved for a loan.

Enough already, huh?  That’s all I have to say.  There are just too many variables that if it’s something YOU can control, you should.  You may want to check out our office blog titled Pain in the Assets – this goes over another important piece to your loan puzzle.  With all that can go wrong in the loan process now due to guideline changes, title issues or bank issues, we need all the humor we can get, so hopefully you like our article.  I’d love to do your loan right the first time by educating you BEFORE things become an issue.

Huh? What dispute? The one I am having with my roommate or with my parents about buying a home? You may have many disputes going on in your life. The one I am referring to is a dispute you started yesterday or 10 years ago with a creditor.

If you’ve been one to check your credit or maybe have had some issues in the past, you may have seen erroneous “tradelines” on your credit report.  A tradeline is an item of credit — car loan, credit card, mortgage, student loan,etc.  Now, if I were you I would be all over that like a bee to honey.  I’d contact the creditor and “dispute” the inaccurate information.  Wouldn’t you?  The whole goal is to get the right things reporting on your report, not items that don’t reflect your score and ability to pay on time.  True.  BUT one little catch.  Though you’re trying to BETTER your credit situation, you are actually making it harder to get financing.

Seriously?  Helping your credit/disputing an account = tough time getting a loan.  Tough to follow that logic,huh?  FHA is the most popular loan right now and the most lenient when it comes to credit scoring, as well as only requiring 3.5% down.  However, they have this little guideline that has been creating BIG issues for folks getting home loans.  The deal is, if you have disputed an account on your report, regardless of what the dispute consists of, your loan guidelines just got stricter.  Yes, your loan qualifications got tighter because you were trying to help your score improve.  Does that make sense?  Nope, not to me, but lately, many of the “rules” and changes have caused me to scratch my head quite often.

So, what changes with your underwriting guidelines?  For one, your loan must be manually underwritten.  90% of my loans are run through and approved through AUS (automated underwriting system).  Information about you in … decision on a loan for you out.  Slick and easy.  Your file is still processed, verified and still gets in front of an underwriter for the final stamp of approval.  In a manual underwrite, it doesn’t matter what the loan decision is through the AUS.  It’s no longer eligible for this to move to the underwriter faster and with more assurances of getting  your final approval.  It now has to be reviewed in depth and documented in depth in order for an underwriter to make a decision.

The rules to follow:

• Your ratios cannot exceed 31/43%.  This means you cannot spend over 31% of your GROSS monthly income toward your house payment, OR over 43% of your gross monthly income toward your house payment and other monthly debts.  This is concrete; no wiggle room here.  We will use the lesser payment for qualifying when choosing the payment you can be approved for.
• We must get traditional VOE’s and VOD’s (verification of employment and deposits)  So, even though you provided me with W2′s and paystubs, as well as bank statements, we must still get this information from a 3rd party.  No fun especially since some banks and some employers charge a fee to give us that information.  Unbelievable.
• We must do a VOR which is a verification of rent.  Important that we confirm you make rent payments on time.  Don’t worry if you’re not renting and with family; this won’t hurt your chances of getting a loan.
• The biggest one — you must have 2 months of reserves.  In layman’s terms, that means after closing, you need 2 months of your PITI payment leftover.  This can include retirement.  Here’s the thing.  Most first time buyers have a hard enough time coming up with their down payment or minimum investment depending on the first time program the buyer uses.  Now you’re saying we need money left over?  Yup and it hurts.

So how do you combat this?  Well, there may be a way to work on getting the dispute removed.  For instance, you could contact the creditor and tell them you don’t want to dispute the account any longer.  About 30 days after you call, we can re-pull credit to make sure the verbiage “account in dispute” has been removed.  It’s not an ideal situation, BUT, it would allow for a faster decision, more leniency on what you qualify for and NO requirement to have money leftover after you close, though there is nothing wrong with that!

The moral of this story — don’t wait to find a house to make an offer to find out you might have to wait due to this rule.  Make sure you’re getting pre-approved with a lender that knows these guidelines and looks for them when reviewing your report.  Also, there are people I can refer you to with regard to credit restoration if you’re in that boat.  Let me help you get ready for the biggest purchase of your life.  Knowledge is power and the more you know and can prepare for now will save a lot of headaches and stress when you do buy.  I think you’ll have enough of that just from doing something new!

Oh no, the tax credit is gone!  Why would I want to buy a home?  A fantastic question that we will answer in this educational evening about buying your first home.  Please join Steve Howe, Realtor MN Real Estate Team, and me, on Thursday May 20th to learn the steps involved in purchasing a home.  The seminar goes from 6:30-7:30 pm and is located at the Cornerstone Mortgage office at 436 Gateway Blvd in Burnsville.  

Our agenda is simple — to educate.  Would we love to be your Realtor and loan officer … of course.  Do we make you feel like you HAVE to use us — no.  This isn’t a high-pressure seminar.  It’s a relaxed atmosphere where we hope you will learn a lot, get your questions answered and be able to make good choices moving forward in this process.

We will talk about the process in the order you’ll go through it, starting with pre-approval and ending with getting the keys to your home.  We will also discuss the available first time buyer programs and the many reasons why it is still the BEST time to buy, even without a tax incentive.

If you’re interested, please RSVP to clavey@houseloan.com as soon as possible.  We’d love to have you and look forward to sharing our knowledge.  Most importantly, come with questions!

You may have heard that it’s getting harder and harder to qualify for a loan.  It’s true.  Though things have lightened up a bit, some old rules have come back into play, as well as new rules are being enforced more than ever.  For the most part, I am referring to FHA financing below as they are the most lenient when it comes to qualifying for a home.  More than 95% of my clients use this loan type due to this, the lower down payment requirement and the ability to receive a gift.

These days, what do you need to know with regards to credit requirements?

• Your credit score must be 620 or higher.  The line is drawn in the sand on this one — higher requirements for conventional financing.
• You must have THREE tradelines* with at least 12 months history.**
• If you have ANY disputed accounts, we MUST manually underwriter your file, per FHA.***
• Judgments and liens must be paid in full prior to or at closing.
• With FHA, collections do NOT have to be paid off.
• With FHA, student loan payments DON’T have to be counted in the ratios for qualifying IF they are deferred and we can get proof they won’t start until at least 12 months after your first payment is due.

For the most part, these are the main things to know about credit these days.  So you know, first time buyer programs aren’t programs that allow anybody, such as people with bad credit, get a loan.  You first have to qualify for a mainstream loan, like FHA, VA or Conventional.  Once you’ve passed their muster, then we look to see what first time programs meet your situation in terms of income, household size and location.

And some tips for dealing with your credit?  If you want to buy a home, you need to watch a few things:

• Make your payments on time — period.
• Bring your credit card balances down to 50% or less of the available credit.
• Don’t apply for new credit or have your credit pulled.
• Don’t consolidate credit cards.
• Definitely don’t close accounts, whether you use them or not.
• Don’t pay off collection accounts unless your loan officer advises you to (if you pay off an old account, it could negatively affect your score)

Certainly, if you have any questions, don’t hesitate to contact me.  It’s best to talk about what you want to do with your credit PRIOR to doing it.  Easier to “fix” a potential problem before it happens.  Once it’s done, it’s done.

*Tradeline is an item of credit on your credit report.  It can be a credit card, house payment, car payment, student loan or another type of installment debt.  Collections and derogatory credit don’t qualify as a tradeline.

**Some first time buyer programs defer to FHA standard rules and don’t require the 3 tradeline minimum or 12 month history.  Check with a first time buyer expert (like myself ) to see what you can do if you don’t meet these parameters.

***Most loans are run through an automated system to get an answer and all still get seen by an underwriter for final approval.  However, if there is a disputed account, the automated system isn’t acceptable and an underwriter MUST look at the file and stick to standard FHA guidelines.

Do you know the answer to this?  Have you thought about the responsibility that comes with homeownership?  It is nothing like renting.  You can’t just call the supe to come over and fix the clogged sink or make a call when your neighbors are too loud.  It’s a really big deal this thing called homeownership. 

In a recent survey, the main reason first time buyers bought was an affordable market.  The two reasons that followed were the tax credit and the low interest rates.  Now, today is the last day you can take advantage of the tax credit.   As you have heard over and over, you need a signed and accepted purchase agreement  by today AND must close on your new home by June 30th. 

Honestly, how did you answer the question above “Why are You Buying a Home”?  Was it because you could get an $8000 tax credit?  As much as I hate to say this, if your answer to this was yes, you’re not alone.  I have talked to so many people in the last 12 months that decided to buy because of the money the government was giving away.  My advice to them — great incentive to get out and start looking, but only purchase if you’re ready AND completely understand what you’re getting into.  I just tweeted that it’s better to have “lost” $8000 vs. $80,000 or more due to a bad judgment on buying a home just to get the credit. 

Here’s the thing.  Yes, the money will be gone and that’s a bummer.  I can’t help you there.  BUT, what I can do is offer up the other two reasons people bought this year — affordability and low rates.  Seriously, this couldn’t be a better time to buy.  As we discuss weekly on our radio show, MN Real Estate Show on KTLK 100.3, this market is going to be here a little while — at least another 2-3 years.  Home prices are not going to rebound fast because we have more foreclosures to get through.  With that said, homes under $250,000 are still being gobbled up fast if they’re decent homes.  Regardless of that, you have the lowest prices to purchase at in record years.

And what about low rates?  I don’t have a crystal ball — wait, I DO have a bouncy crystal ball, but it doesn’t help me predict the future.  I wish it did and I wish I had that ability.  What I do know is that there are PLENTY of first time buyer programs out there with down payment assistance and lower-than-market interest rates.  I have access to them all, PLUS, we do a few other things that most lenders don’t.  For instance, in one of my blogs I talk about the 203K loan with FHA.  I noted in the paragraph above that homes are gobbled up if they’re decent.  What about the less-than-perfect homes?  As a first time buyer, it’s tough to afford a home and then on top of it have money to do work.  This is your BEST opportunity to make the house “yours”.

These are all great reasons to buy a home.  And there are more, such as no longer paying another person’s mortgage by renting.  May as well put your money into something that will appreciate — though that will take a little time, it’s still a better investment.  There is something to be said about having your own place.  Downside is you will have more expenses, maintenance, including furnishing and decorating.  These are all things to consider.  But, it’s yours.  Not someone elses.  You can do whatever you want to the house.  You don’t have to answer to anyone.  It’s the pride of ownership and that alone is one of the best reasons to buy in my opinion!

Then there’s the “tax credit” you get.  No, not speaking of the one that expires today.  That would be silly.  I am talking about the tax benefit of owning a home.  Most of you probably don’t get to write off any expenses, like the donations you give of stuff or money.  Wouldn’t it be nice to get a benefit from that?  As a homeowner, each year you can itemize all of the interest you pay on the loan and all the property taxes you paid that year.  Did you know, you can also itemize the state income tax that you pay?  Nice benefit there.  I don’t want to mislead you.  Not everyone will get this tax benefit, or I should say, be able to utilize it.  If the loan size is smaller, along with lower rates, you may not have enough itemized deductions to EXCEED the standard tax deduction listed on page 2 of the 1040′s.  And that’s okay.  Sometimes not paying a lot for a home loan is a really good thing!  There’s more to this and I am happy to explain further your benefits based on your situation.

So, the question still stands — “Why are You Buying a Home?”  I’ve given you plenty of reasons that still make sense even though the tax credit is expiring.  My hope is you have other reasons for owning.  But as I said earlier, it’s NOT something to enter into lightly.  As a matter of fact, the best advice I can give you, short of coming to one of my seminars , is to go to a Homestretch Course.  This will not only teach you most of what you need to know when buying, but also what it takes to maintain your home after it’s yours.  Also, this will meet the pre-requisite to be eligible for most of the first time buyer programs.  Look at that — kill 2 birds with one stone — learn about homeownership AND qualify for down payment assistance.  And who doesn’t want interest-free money and lower rates?  Sign me up

Are you buying your first home?  How has your experience been so far — with the realtor, loan officer, even the listing side?  What have you heard about the home buying process?  Is there just one house out there for you or could there be more?  Good questions to ask yourself as you go through this unknown and possibly long process.

I can tell you that everyone’s experience is different.  That’s just the nature of the beast.  But, because this is such a personal decision, you really want to  make sure you’re working with people you can trust and actually like.  I know this may sound silly.  I have known people to buy big ticket items, including houses and not like who they worked with.  Gosh, I hate to say it, but I fell into this category once. 

About 9 years ago, I went to buy/lease a car at Lexus.  Now, I drive a mini-van — nature of the “mom” beast!!  Anyway, we only have 2 options in the MN area for Lexus — I chose the closest one to test-drive on December 31st for their “December to Remember” event– so I was under the gun to BUY before January 2nd.  I test drove a car with a salesperson who I am happy to say is no longer there.  I found the car I really wanted, but needed to negotiate the buyout of my other car — I got an estimate from them, lower than what I KNEW I could get.  I was determined I was going to buy a car THAT DAY, so I brought my husband for his seal of approval.  I had the price of the new vehicle just where I wanted it — now for my trade.  A heated discussion ensued between my husband and the used car sales manager about HOW they determined the price — Kelly or NADA.  Oh, what a night of poor behavior on both parties, even me for not standing up to the rude behavior.  To end it all, the salesperson yelled us out the door saying he never wanted to see him in the dealership again — real professional!

My husband was walking … but I wanted the car.  Being a person of great determination and getting my way, I actually went back to the dealership on January 2 and bought the car.  Yes, I bought the car.  I was blinded by my desire to have THAT car, that it didn’t matter how they treated my husband or us.  Looking back, I am ashamed I let something cloud my judgment and my ethical standards.  To this day, that whole deal frustrates me.  I know how people in sales and the service industry should behave.  Though the customer isn’t always right, they deserve to be treated with decency, care and the utmost respect.  We were NOT respected and I still went through with the deal.

Okay, so where am I going with this?  A car purchase is NOTHING in relation to purchasing a home — a VERY big financial decision.  It makes ALL the difference in the world to not only like who you work with, but who you trust.  As first time home buyers, many Realtors and loan officers don’t “have the time of day” to help you.  Maybe your price point is too low or your knowledge is less than a previous home-owner that they don’t want to INVEST in something that may not reap financial rewards.  I know loan officers AND Realtors that have this mindset.  I do NOT do business with those Realtors.  I want someone who shares my similar values and philosophy — doesn’t matter what price, loan amount or what type of knowledge you have.  It is my responsibility to serve you, to educate you and make sure you are comfortable with the process — a process that can be scary and can be blinding by the new “shiny” house.

So what does love have to do with it?  EVERYTHING!  You don’t have to “love” the people you work with, but you definitely have to enjoy and trust them.  Another point of all this — I bought a car from someone who didn’t care about me, who treated me and my husband with disrespect.  A car … how many of those cars are out there?  I had options.  I did NOT have to buy from them.  With houses, this is the same.  You may fall in love with a home that is perfect for you and your family.  It just may be, but what you need to understand is there are other homes out there.  This isn’t the ONLY home that meets your needs.  The Realtor your working with isn’t the only Realtor out there that can help you.  I am aligned with so many AWESOME agents that really do their job for you.  That’s why we’re here.  Sure, we make money and sometimes not enough to cover the time invested.  BUT, it’s not always about the money — it’s about providing a service with our expertise and show you that we care, that we love what we do and we would like you to love the experience.

There you have it.  So, if you’re in a ”bad relationship” with your Realtor or loan officer, don’t give in.  Don’t think that you can’t do any better, that you have to settle.  I’ve done that and it feels horrible.  Nine years later I remember that experience like it was yesterday.  Just think if I was LIVING in that house that someone sold me that wasn’t my best fit or the payment was really out of my range?  Now how do you think I’d feel?  LOVE the characteristics, knowledge, personality and personality of the people you invest your time with to spend the most money you have ever spent before!

That all depends on who you ask. The first time buyer tax credit ends on April 30th. What exactly does that mean? Do you have to close  on a home by that time – because that’s only 2 weeks away and you’d be hard-pressed to do that. 

The reality is you just need an accepted purchase agreement by the 30th of April. So, that gives you 2 weeks to look at houses and make offers like homes are going out of style. Houses are moving quickly, especially in the first time buyer price point — under $250,000.

So what do you need to get that offer accepted? Most importantly, a SOLID pre-approval. These are tough to find. Many lenders aren’t able to stand behind their pre-approval letters. We can and we do. If you haven’t given your lender your W2s, federal taxes, paystubs and bank statements, you haven’t been fully pre-approved. Your lender is just “assuming” the information you provided is accurate. Proof of these things is crucial to make a backable decision — as is running your loan through an automated system.

Okay, so you have the pre-approval.  Have you been informed of all the first time buyer programs that are available to you or is your lender just brushing off their importance?  Lately, I have had so many people ask how they can get down payment assistance, but they’re pre-approved.  Weird, since their lender should be telling them about ALL their options.  Have you had this happen yet?  I hope not.  These programs may be able to help you get into a home sooner than later too.

The other important date … June 30th.  This is the date you need to close by.  Another important reason to make sure you’re working with a reputable lender.  Seems like this isn’t a problem, it’s over 2 months away, right?  Some lenders aren’t getting things done in a timely manner.  If you have your pre-approval figured out ahead of time, then it’s a quicker process once you’ve found the home.

Long and short, you’re not too late.  You just need to make sure you start looking now.  Oh, and not only is your pre-approval important, but so is the Realtor you choose.  Realtors play a huge part in whether this $8000 can become a reality.  Are they looking for homes every day within your search parameters?  Are they having you act immediately on homes that interst you?

There’s a lot to this puzzle.  It can easily be put together if you have the right corner foundations — reputable lender, knowledgable Realtor, backable pre-approval and desire to be a homeowner!  All the other stuff will fall into place.  As long as you make the efforts to be open to looking daily, willing to take the advice of your Realtor and are willing to supply all paperwork required by the lender in a timely manner. 

So, let me know what I can do to help you reach that pot of gold at the end of the home-buying rainbow — more importantly, give you all the pieces you need to complete your home purchase!  And if we’re lucky, we can help you get that $8000 just for “showing up” to buy a home.