Our Service Area Los Angeles Experts Your FICO score Improve Your Credit Score Disputing Credit Reports


April 2nd, 2009 10:41 PM

Dear Friends,

In noticing several market indicators during the past several weeks, this might be the most opportune time to purchase a home. Interest rates are at an all time low and property values have gone down precipitously providing affordability for many buyers. We've noticed a slight improvement in lenders willingness to provide financing for these purchases. All told, the climate is starting to change towards the benefit of the buyer in purchase transactions.

However, there are circumstances where one contemplating in purchasing a new home, must proceed with caution.


One must be able to have all of their 'ducks in a row'. One must be prepared for the newest twists in underwriting guidelines which are at times can be considered Draconian in some measure and costly in others. In order to prepare for the purchase of your newest home, you must have these documents ready to be submitted to your lender or mortgage broker in order to move forward.

1. 2008 & 2007 1040's

2. 2008 & 2007 W2's

3. Your last 2 PayCheck stubs denoting Year To Date Income

4. Last 2 Months Bank Statements showing the monies for the down payment, closing costs and at least 2 months mortgage payments in reserves.

5. Middle Fico scores of 680 or more are preferred. However, if you have scores less than 680, there will be a premium to be paid in additional points and/or fees. Many lenders will reject a loan application with a middle FICO score less than 620. 

6. Get Pre-Approved or Pre-Qualified. MoneyTeam, any other lender or mortgage broker can provide a letter stating the maximum loan amount you will qualify for. There are sellers now requesting a bonafide Pre-Approval before accepting an offer. It's better to be Pre-Approved as the purchase process is streamlined by curtailing the time element and provides your Realtor and the Seller of the property confidence of your viability as a Buyer. Moreover, if you have credit problems of a specific nature, this information will help determine your ability to purchase the property and the costs involved. 

7. If you are Self-Employed and deduct all of your expenses, you might have difficulty in obtaining financing unless your Adjusted Gross Income can debt service your new mortgage. Many self-employed individuals face these challenges when applying for a loan. At one time Stated Income loans was the financing of choice. Unfortunately, 'Stated' loans are no longer offered and if available are costly and not worth the trouble.

8. Employment. Ideally, you should be employed at your job for at least a 2 year period. If you changed jobs during the past 2 years, your employment should be similar or in the same profession. If you were a Teacher then decided to change occupations to become a Marketing Rep, this would pose a problem. As well, if you decided to take 6 months off from your job or if you were laid off for a certain amount of time, this might hinder your qualification to purchase a home. There are requirements which mention you must work continuously for a 2 year period.

9. If you are a First Time Home Buyer, this is a great time to purchase a home. There are incentives which allow you to have an $8000 tax credit from the US Government for home purchases in 2009. This credit can be used when you file your 2009 1040's next year. With this credit, you can pay down any federal taxes owed and if this is not the case, you can receive the entire amount. There are stipulations however. You must live on the property for at least a 3 year period and have income not to exceed $150,000 for a married couple. Please check our next TeamBlog for more details on the $8K Tax Credit.

10. There are delays in underwriting loan packages. Our goal is to provide clients a loan Approval within 72 hours of submission but there is an 'avalanche' of loan activity many lenders are now experiencing. Lower rates brings additional refinances. Lower property values brings an upsurge in purchases. Foreclosure avoidance brings about additional loan modifications. Be prepared for delays of up to 6 business days for an underwriting decision on a purchase or refinance loan request.

11. Trust. In this age where integrity and honesty is in short supply, you need to feel comfortable in opening up to the persons you've hired to help you in your desires to pursue the purchase of your 'dream' home. There might be bumps ahead to closing but always know whoever you choose as a lender, mortgage broker or Realtor, they are there to help you. Ask around, seek recommendations from close friends and associates for those persons you would like to be on your Team in one of the most important decisions you will ever make in your life. A pleasant on time closing of your escrow is always a memorable event to behold!   

If you need a Realtor to work on your behalf, please call our office. We can recommend agents eager to help you buy the house of your dreams!

Thanks Again

Posted in:General
Posted by Jesse Dorado on April 2nd, 2009 10:41 PMPost a Comment

Subscribe to this blog



My Favorite Blogs:

Sites That Link to This Blog: