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Six Ways to Bring Your ‘A’ Game to the Home Financing Process

Hope is Not a Strategy. 

Six Ways to Bring Your ‘A’ Game to the Home Financing Process

Hoping to buy a new home soon?
Hoping you qualify for the amount you want?
Hoping the lender doesn’t laugh at your credit scores?

As former New York City Mayor Rudy Giuliani said in a speech in 2008, “… hope is not a strategy.”

Don’t get me wrong…hope (and prayer) can work in the face of challenging situations. BUT you need to be prepared to do your part when it comes to buying or refinancing a home. That means taking control of the home loan process. Yes, YOU, the home buyer, can take control of the financing of your new home.

Are you ready to bring you’re ‘A’ game?

You might already know this but the difference between a thermostat and a thermometer is that a thermometer reports the temperature. It doesn’t have any control; it just tells you that it is really hot!
A thermostat, on the other hand, allows YOU to set the temperature. The thermostat regulates and controls the temperature based on what YOU want.

In the same way, you can take control of your home loan process. Determine the outcome you want and make a difference.

Six Ways to Bring Your ‘A’ Game to the Home Financing Process

  1. Know Your Credit.  Do NOT just know the scores; identify and understand why the scores are what they are and what they need to be. Too much debt? Too little debt? Got unpaid collections? TIP: do not pay them off yet. Do you think a score of 719 is high enough? It may not be. Do you think you will never buy a home with a score of 590? It may be high enough. Become your own credit expert.
  2. Know Your Income. Do not just know the amount you make every month; know how the bank or lender will interpret your income and what amount they will use to approve you. Only employed for 18 months? Is half of your pay considered commission? Just graduated and start new job next month? Is most of your income from tips or overtime? Self-employed and making less this year than last? These are all interpreted differently and may affect your qualification considerably.
  3. Know Your Assets. Do not just know the amount you have in the bank or have access to; know how much the bank or lender will be able to use. Did you recently transfer money from overseas? Did you get a gift from a family member or friend? Is your Uncle Joe giving you his prized gold coin collection? Planning on “borrowing” from your business account? These are all viewed differently and may have restrictions for use based on the lender or bank requirements
  4. Know Your Property. Do not just know what kind of home you want to buy. Know how the bank or lender interprets the kind of home, the use of the home, the location of the home, the condition of the home. Looking to buy a condo? Second home in Tahoe? Rental property? First-time home for your daughter? Six-unit apartment complex for extra income? New construction? Plot of land to build on? Each of these will have unique requirements for down payment, potential restrictions for occupancy, and “overlays” from investors t
    o minimize the risk involved in the transaction.
  5. Know Your Rules. Rules? End of last year, the lending landscape shifted under everyone’s feet, with the roll out of TRID. Never heard of TRID? Get caught up here. Do you need to close quickly on a purchase? Purchasing with a 1031 Exchange? Are you looking to sell your existing home and buy a new home, back to back? The new TRID rules and more specifically, the mandatory wait periods, may affect you and your new purchase, costing you thousands of dollars if not properly understood and managed.
  6. Know Your Lender. The final and most important way to bring your ‘A’ game to the home financing process is to team up with an experienced, knowledgeable and accessible Mortgage Advisor. You want to work with someone who knows/understands:
    • How to fix or increase your credit scores,
    • How your income will be interpreted by the investor,
    • The unique seasoning requirements of most investors,
    • The various unique financing differences of distinctive property types and,
    • TRID and other important rules and regulations.

 

You are on the cusp of embarking on what could be the biggest financial decision of your life. Take control. You can bring your ‘A” game and in the process make this new purchase an enjoyable and stress-free chapter in your life.