45 Tips for buying a home

 

1. Have all your money in one account prior to purchasing a home 2 months prior to getting under contract.(This makes it easy to source your funds)

2. This will make #1 even better. Open a brand new account just for purchasing a home. This will eliminate all deposit questions to that the underwriter may have. (Must be 2 months old prior to purchasing a home)

3. Have zero open disputes before having your credit ran by a lender.

4. Get pre-approved first then shop for a home.

5. Stop worrying about the interest rates until you get under contract. (Don’t ask what’s the rate, your lenders response will be, do you have a contract? If not the rate is irrelevant. Rates change hourly. It’s okay to ask the general rate but understand they change based on 18 different factors thus making everyone’s situation different)

6. DO NOT BUY ANYTHING BIG PRIOR TO BUYING A HOME!

7. Get your Debt to income ration down as low as you can. This will allow you to get a higher pre-approval and better approval offs.

8. Have all of your documents ready prior to speaking to your lender. Start with Drivers License, 2 months asset statements (POF), 2 years W2’s, 30 days paystubs.

9. If you plan on using overtime, bonus, etc… must be with same company 2 years and send your last paystubs for the year for the previous 2 years. This will show a breakdown of your income.

10. If a lender asks your for something don’t take it personal, they’re asking for a reason.

11. Do Not Run Your Credit: while doing a mortgage loan.

12. The lowest rate is not always the best option. For example if you decide to buy 2 discount points for 10K and it only saves you $150 @ month and your moving in 5 years, you never recoup that 10K back. You actually loose $1000.

13. Before submitting an offer reach back out to your lender to have them rerun your loan scenario through the LP/DU/GUS so there are no surprises.

14. If your self employed, you’re going to need 2 years of business tax returns. If you write everything off, a bank statement loan may be a better option for you.

15. Get your credit collections and charge offs taken care of prior to running credit.

16. DO NOT LIE ON YOUR MORTGAGE APPLICATION,  THEY WILL FIND OUT 

17. The 4 best loans are FHA, VA, USDA, CONVENTIONAL. They all have their pros and cons. Not one loan is better then the other because everyone’s situation is different.

18. Source your funds, cash will not be accounted for if it’s under a mattress, in a jar, in a shoebox, etc….. All money must be sourced.

19.Find the house you love, not the interest rate.

Rates are not permanent, and can always be refinanced.

20. Do not keep up with the Jones, you do not need to be house poor. Find something that fits your budget.

21. The process can be very fast, you need to act with urgency during this process. The more you delay, so does your closing.

22. The lender advertising rates that are unreal is most likely a bait and switch, while going rates are 5-6% be very weary if the lender saying their in he low 4s.

23. Pick a title company that the lender or realtor recommend as a relationship is built there and that will help the process move faster and smoother.

24. Get a second opinion from a professional not here  (Everyone’s situation is different therefore Jim’s deal is different then Tom’s deal)

25. As you go through the process continue to send in updated paystubs and asset statements as you get them.

26. Understand that even if you have a fixed rate your mortgage payment is subject to go up due to taxes and homeowners insurance.

27. ARM’s are great products especially in this environment or if you plan on staying short term in the home your buying.

28. Stop thinking the more money you put towards the downpayment will make a huge difference, you’re better off buying discount points to get a lower monthly payment then rate. For example 10K towards the downpayment is only 28$ @ month savings over 30 years, where as 10K bought in discount points will most likely save you $100+ @ month.

29. Don’t tell the loan officer how to do their job because you read something that may or may not be true. Trust me the loan officer wants to get your loan done as quickly as possible. Arguing and treating them bad will not help you.

30. Gift funds must be sourced. If Jimmy gives his brother Tom a gift of 10K, you will need a gift letter, copy of the check , Jimmys account statement after the money has left his account, Tom’s account statement after the money clears.

31. If you owe the IRS money disclose that to your lender.

32. If you pay child support, alimony, or anything like that, disclose that to your lender.

33. If you co-signed for someone’s car or student loans they will be counted against you unless the person you co-signed for has proof they have been making the payments on time for 12 months.

34. Get an inspection.

35. Understands the steps in order: Clean up credit, save money, apply with lender, turn docs in, preapproval, search for realtor, search for home, contract, appraisal and title, close.

36. Multi unit properties: you can use the income from other units to help you qualify.

37. Learn about PMI

38. Lenders saying no PMI have the PMI built into the rate hence giving you a higher rate. PMI

is on all loans except VA or unless you put 20% down payment.

39. 203K loans are used to buy property and upgrade it if the home fits the guidelines.

40. FHA isn’t the only first time homebuyer loan program.

41. Down Payment assistance loans come with higher rates.

42.Be careful with grants from the states.

43. If buying a property with a HOA, check the hoa guidelines and what the cover.

44. Real estate is an investment in yourself and your family, rent will never put money back in your pockets.

45. Don’t run to big name lenders, check with your local lender first.

Bonus* It’s easier to buy a multi unit than a single family home. The income you make as a landlord is used as personal income for you. Which in return covers your mortgage payment if you price the rental out to the way it needs to be!