First Stop 4 Home Loans

I can’t believe how quickly the third Thursday of the month came!  Wow.  I’m ready to educate you on the home-buying process.

The FREE seminar starts at 6:30 and ends between 7:30 and 8pm.  This seminar has been presented many times and continues to be a successful avenue for first time buyers to get their feet wet on the process of buying  home.  Be prepared to learn what you need to do starting with the pre-approval from a lender to getting the keys at closing.  There are a lot of steps in-between but if you’re familiar with them, the process will be much smoother. 

Needless to say, the market is a little upside down.  Things have and are changing daily with regards to down payment, credit requirements, as well as documents needed to verify assets or income.  What hasn’t changed are the great opportunities to get into a home at a great value, pay as little as $750 out of your pocket AND take advantage of some great programs made especially for you.

I will be honored with the presence of my first time buyer partner, Steve Howe.  He will address the other “stuff” you need to know about making an offer, inspections and the process in general.

Our goal for the evening is to give you the information you need to feel comfortable about setting foot into the world of buying a home and eventually, home-ownership.  We want to educate and honestly hope you will gain a clear understanding of the process, as well as the great opportunities the market has to offer you right now.

Please RSVP to Cheryl by clicking here.  You can bring as many guests as you want and most importantly, come with questions!  See you tonight.

With rates falling, a few of the first time buyer programs have been lagging behind as they still have higher rates.  A regular FHA fixed rate is between 4.5% and 4.75%* today.  The Dakota County program’s rate was at 4.99%.  Many people are still taking advantage of the program since it offers down payment assistance.  Recently, they lowered the rate to 4.75% to be competitive with the market.  So you know, this is a rare thing for first time progams.  Normally when there is money alloted to the counties, the initiative is set at a certain amount of funds and a certain rate.  This is great news!

To repeat, many people are taking advantage of this program not just for the rate, but the opportunity to get down payment assistance.  The Dakota County program offers three tiers of assistance depending on household income.  Household income is defined as income brought in by all people in the home over age 18 and includes such income as bank interest, child support/alimony, side jobs, etc.  Even if the income can’t be used for qualifying (i.e. overtime that has been received for less than two years), it is still figured into the limits for first time buyer programs.  Here are the down-payment tiers:

Household          10%                         5%                      2.5%
Size                  Income Limit      Income Limit    Income Limit

1                           $29,400                $45,100              $84,000
2                           $33,600                $51,550              $84,000
3                           $37,800                $58,000             $92,400
4                           $42,000                $64,400             $92,400
5                           $45,400                $69,600             $92,400
6                           $48,750                $74,750            $92,400
7                          $52,100                 $79,900            $92,400
8                           $55,450                 $85,050           $92,400

Max assistance for the 10% limit is $10,000 and max for the 5% limit is $7500.

So what do the numbers mean? Let’s reference the middle column. Let’s say you have 3 people in your household. That means your total household income must be under $58,000 — one cent over and you go to the next column. In this scenario, you qualify for down payment assistance equal to 5% of the base loan amount, with a max of $7500. The first time buyer assistance is a second mortgage that is placed against your home when you close. It is an interest-free and payment-free loan. If you received $7500, you would pay back $7500 either when you refinance your loan or sell your home.

If you’re looking in Dakota County for your first home, definitely check out this program.  All lenders are not created equally with first time programs.  Lenders must be approved to do this financing.  Obviously, I can help!  It’s time to take advantage of all you have to gain as a first time buyer in this market!

*Rates are subject to change.

Can you say “whoopee?” 

Late Wednesday night (June 30th), the Senate took the lead of the House of Representatives and passed the Homebuyer Assistance and Improvement Act which extends the CLOSING date for those eligible to receive the federal tax credit under the American Recovery and Reinvestment Act.  This is part of the bill that was presented.  You can see other details of this bill here.

First time buyers, those who haven’t owned a home in the last three years, as well as current owners who have owned a primary residency 5 of the last 8 years, were eligible for a tax credit if they purchased a primary residence — up to $8000 or $6500 respectively.  The guidelines required buyers to have a signed purchase by April 30th and CLOSE on the home by June 3oth.

The problem was that many of these home purchases were being held up buy a multitude of things — the banks that own the homes, the banks that are considering a short sale for the sellers and even title and mortgage companies.  The argument was that the buyer was not at fault for this delay if they had the signed agreement by April 30th so they shouldn’t be penalized.  Low and behold, buyers now have until September 30th to close on their house to still get the federal tax credit!!

So, if you are one of those people that thought you missed out on the credit because something was preventing you from closing on your home prior to June 30th, yesterday, then you can breathe a sigh of relief!  Good luck with your process and enjoy this awesome gift from the government!

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!

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

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.

As you may know, there are so many things available for first time home buyers — ending soon is the federal tax credit of $8000.  You need an accepted purchase agreement by the end of April and must close by the end of June.  There have been lower rates and of course, plenty of first time buyer programs.  One in particular is the Ramsey County FirstHOME. 

If you’re looking in Ramsey County, or I should say, the “suburbs” of Ramsey County, you could take advantage of a great opportunity.  If you’re looking in the city of St. Paul, then there is a different program you may be interested in — the CityLiving program.  But, if you want to live in one of the many cities* of Ramsey County, this may just be the program for you.

Available as an interest-free loan, is up to $20,000 that you can use toward closing costs and down payment.  There’s a few ways you can use this money to your benefit.  One, is to help your buying power.  The $20,000 may allow you to afford a larger home or higher sale price.  Speaking of sale price, the maximum purchase price on this program is $200,000.  Or, two, you could keep the price range you’re pre-approved for and bring your payment down.  Not a bad deal.  Did you know that for every $10,000 in price, it’s about $70/mo in your payment?

There are a few guidelines that are specific to this program.  Like all first time buyer programs, there are income limits.  These income limits take into account the total income from the household, not just from the person on the loan.  This even includes children 18 years or older that are working.  Along with this, there is a requirement that you have at least THREE years of working full-time.  The FirstHOME program is not a solution to help first time buyers coming right out of school to qualify for down payment assistance.  A year or so ago, a GREAT change occurred to this program — you no longer have to WORK in Ramsey County to qualify, which opens a lot of doors for more people to qualify.

You must attend the first time buyer Homestretch class overseen by the MN Home Ownership Center.  Even if you didn’t have to take this 8-hour course, I highly recommend it.  It will go over everything from the process with your loan, buying the house and even talk about “what ifs” as you’re a homeowner, such as foreclosure prevention.  And hopefully, with guidelines that are getting tighter and tighter, you won’t have the opportunity to get in ‘over-your-head’ with a house payment.  Trust me when I say, this is never my goal.  Sure, I want to help you get the house you want, but it should never be a the expense of you not being comfortable with or able to make the payment.

An interesting requirement for the FirstHome program has to do with ratios.  Ratios are a certain percentage of your GROSS income (pre-tax) that we can use toward your house payment (housing ratio) or your house payment and your other monthly debts (debt ratio), which ever is less.  For all practical purposes, we are limited to keeping your debt ratio under 45%.  In order to be eligible for the assistance, your “housing” ratio needs to be OVER 30% of your gross income.  The purpose then, for the assistance, is to bring your housing ratio down as close to 30% as possible.  If you are under 30% to start, then this program won’t work for you .

Wanna know something else that’s cool with this program??  How about the ability to use this WITH the MN Housing program, where you not only can get a lower-than-market rate,  but also could qualify for another $5000.  Yes, another $5000 — you could receive a total of $25,000 to use for your new home purchase.  Wowsers!

Anyway, this is a super program!   Let’s see if you can make these monies work for you while you’re still a first-time homebuyer.  If you want further information, please don’t hesitate to give me a shout or email.  I am here to help. 

*Cities eligible for the program:
Arden Hills, Falcon Heights, Lauderdale, Little Canada, Maplewood, Mounds View, New Brighton, North Oaks, North Saint Paul, Roseville, Shoreview, Vadnais Heights and White Bear Lake

As much as I’d like to say pre-approvals are all the same — they’re not.  Though you can buy the same pair of jeans at numerous stores, you cannot get the same pre-approval from numerous companies.  So why not?  If an FHA loan is an FHA loan, then I should get the same product anywhere I go, right?  Not so much.  The thing is, it’s more that all lenders aren’t created equally, meaning you won’t get the same answer or loan suggestions from everyone.  Also, many lenders don’t have access to the first time home buyer programs.  Due to this, you may very well be steered into a program that may not be right for you OR you may be steered away from those first time programs because they’re “too much work”.  Cry me a river.

The question remains, why aren’t pre-approvals the same?  A pre-approval means different things to everyone.  For instance, one lender may see the pre-approval as just running your numbers over the phone, pulling credit and then issuing you a pre-approval letter.  What’s wrong with this picture?  Isn’t this what pre-approval means?  Nope.  The reputable lenders, me included , realize there is a lot that goes into saying “you can buy a house”.  Yes, we need to run numbers and yes we need to get credit; there is still much more to do.  Your loan must be run through an automated underwriting system (AUS).  This is a program with a million different checks and balances to identify risk or maybe conclude it isn’t a risk at all.  We can run FHA, VA and Conventional loans through this system.  And, it’s HIGHLY advised.  Sometimes the program alerts us to something we missed, such as an issue in credit that’s pages down in the credit report and we missed it.  Other times, it helps us pre-approve a buyer that may not have qualified otherwise.  For instance, let’s say the normal guideline is to take 41% of your gross monthly income toward your debts and proposed house payment.  Maybe this is a bit limiting for what you’re looking for.  Looking at your credit and assets, I can determine that you are well qualified to extend yourself a bit.  (NOTE:  I am not here to increase your payment just so I can do a bigger loan.  You need to spend what you feel is comfortable.)  After I run it through AUS, I may get an approval up to 45% of your income.  This just made it so you can afford a larger loan amount and possibly the house you want.  If the payment is something you can live with, then off to the races we go.  If not, then let’s chat about where you want to be.  Ultimately, this decision should be driven by a budget — something that lays out what you owe and what expenses you have monthly in relation to your NET income (after taxes).  You know, things like clothes, dinner out with friends, a $4 cup of coffee every Monday and Friday, or whatever.  It’s crucial to budget.

Okay, so now you know we need to have the loan run through the automated system.  Now what?  We’re all human.  There is that element of imperfection — typing something wrong, from income to assets — the information is only as good as the accuracy of the data entered.  The next part of the pre-approval is gathering documentation for your loan, paperwork that supports what you supplied on the loan application.  I have had this happen before — a client told me he worked an extra 4 hours a week in overtime.  I confirmed verbally that this has been going on for the last 2 years (need a history of this type of income).  He stated that 4 hours was on the low end and sometimes it’s more.  To be safe, I used the lesser number to avoid a possible inaccurate pre-approval.  It was crazy when I finally got the paystub and low and behold, overtime didn’t really exist at all!    Either he’s not telling the truth (and I always give the benefit of the doubt) or the company isn’t paying him as they should be.  Turns out it was the latter.  Bummer, huh?  Needless to say, my income was off, so it was putting a damper on their qualifying power.  We had to adjust their searches down.  As simple as this may seem, it’s not.  I liken it to buying a TV.  Let’s say your research shows that based on your savings, you can afford a 27″ TV (do they make those anymore??).  You head over to the “big box” store and right there, first thing you see, is a beautiful, crystal clear 32″ LCD TV.  Now, I don’t know about you, but that TV is going home with me TODAY!  I’ve seen what I could have (if I could afford it) and know that’s what I want.  Looking at the piddly 27″ TVs just doesn’t cut it.  This is the same experience with buying a home.  If you’re looking at homes in a higher price range and then come to find out you don’t qualify that high because your paystubs don’t support the higher income, you’ll be disappointed.  Nothing compares to the home that was $20000 more than your new approval amount.  And the truth is, nothing will compare.  It’s tough to wean yourself off something so much nicer, bigger or what-have-you than what really works in your budget.  It’s critical that your lender gets this documentation ahead of time before you start looking.  No sense getting your hopes up for something that isn’t obtainable.

Okay, so now we know the AUS system has pre-approved your home loan and your documentation supports that — now what?  How can the pre-approval differ if the lenders are playing by the same rules?  Another great question.  First, not all lenders know what to look at with the documentation or how to even calculate your income.  Sad to say, but true.  And, not all lenders are supported in the back end to fulfill their commitments to your pre-approval.  Anyone can say you’re pre-approved; but can they actually process your loan in a timely manner, underwrite the file in-house AND fund the loan on time locally?  Not many lenders can say this.  The “big box” lenders are having a very hard time getting deals done in a 60-90 day window.  Don’t get me wrong; they can be great lenders.  It’s tough to give great customer service and attention when there are so many pieces of business coming in — too much they just can’t handle it.  Truth be told, some lenders, more specifically loan officers, just flat out lie.  Many years ago, the lending industry got an “escape” clause if you will.  Essentially, per MN Statute, the pre-approval and the full approval are NOT guaranteed since things may change.  Remember the stuff you shouldn’t do while in the home-buying process?  People do those things, such as quitting a job a few days prior to closing.  I mean really, you couldn’t wait 2 days?  It was just that bad?  He didn’t think it was an issue — we had him approved and ready to go.  Bummer is that investors are requiring a verbal verification of employment within 5 or even 3 days of closing.  We MUST call your company to make sure you still work there.  You can imagine our surprise when the answer was no.  He was stuck — closing supposed to happen in 2 days, no job, no loan.  We did the only thing we could — wait until he got the job.  Since this wasn’t my deal, I have no idea how the listing agent/seller reacted to this big delay.  My guess is they weren’t too happy.  Can you blame them?

And last, the company, and/or the loan officer, can make or break whether that pre-approval is just a piece of paper with no value.  There are a few good loan officers out there that do the right things to insure you are actually pre-approved for a home loan.  Then there are those who somehow survived all the changes and still don’t have a clue how to read a paystub, let alone ask for one.  It’s common sense.  If someone mentions that they get paid tips a huge flashing light goes off saying “Verify Income” sooner than later.  Why?  Well, tips vary and we need a 2-year history of earning them to use that type of income to qualify.  Oh and those tips that don’t make it to the W2 or tax return … can’t use them.  You will find that Realtors who have been around a long time, know and recognize those lenders and loan officers who perform with their pre-approvals.  Admittedly, I made a mistake last summer using alimony income.  I took the word of the borrower that it was consistent, month after month she was receiving it.  When I received the bank statements to confirm the stability of this income, I failed to look closely for the consistency.  When the underwriter can’t see a pattern, it’s really tough to use the income.  Holy cow did I learn my lesson by doing a loan that was completely free – no income for my company and no income for me.  But that’s what you do … stand behind your letters and do what you say you’ll do.  I put it out there and I will make it happen.  You need to find a lender that will do that — of course, I would love to be that person for you!

In a nutshell (of say 1600 words or so ), you can see that more things go into a pre-approval than just “running your numbers” on a calculator and calling it a day.  Knowing the lender you work with is so important.  The Realtors I work with are number one in the Minnesota area and realize the importance of working with someone who can perform, even if the audience did pay for the show!  Be cautious and be certain that you work with the best lenders who come through, day in and day out.  It’s not just a piece of paper that is the same no matter who you work with; it’s truly the “ticket” to whether you get on the home-buying train or have to get off right before your destination.  No fun being dropped off in the middle of nowhere with nothing to do but start the journey over — assuming you can find a ride that can get you there.  Hope to help you get there soon!