Just like your mother said, Don’t dive into waters if you don’t know what’s down there!!!  Here is some serious advice that will help you avoid problems in the underwriting process when you buy a new home this year.

Don’t deposit “Gift Funds” into your account

Gift money must be properly documented in a very detailed and specific way. Speak with us about receiving and documenting gift funds.

Don’t

deposit checks or funds OTHER than your paychecks

Sources for deposits other than your paycheck must be documented. At the least we will need a copy of the cancelled check and a copy of the deposit slip. If the funds come from sale of stock we will also need a copy of the statement before stock was sold and the order to sell in addition to the check and deposit slip. Please hold large deposits for after the close of the loan.

Don’t

move assets from one bank account to another

These transfers show up as new accounts and must be disclosed and the source(s) of funds must be documented separately for each new account. We can verify each account as it stands and you can consolidate your accounts later.

Don’t

consolidate your bills

Speak with us before you begin this process. We can advise you on how to do this and whether or not it is necessary.

Don’t

make travel plans without checking with us

For the purpose of ensuring you move into your home on the arranged date, it is vital that we can reach you and that you are accessible a week prior to the date your loan is scheduled to fund.

Don’t

change jobs

A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

Don’t

buy new furniture or major appliances for your new home

If a new purchase increases your debt load, it may disqualify you from the loan or deplete your funds to close.

Don’t

run a credit report on yourself or open a new credit card

This will show as an inquiry on your credit report. Inquires must be explained in writing and they have the potential to pull down your credit score.

Don’t

pack or ship information needed for the loan application

Important paperwork such as W-2 forms, divorce decrees, Form DD214 and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain.

Don’t

buy or lease a car

The lender looks carefully at the debt-to-income ratio and a large payment such as a car lease or purchase can greatly

More about the author: Karla Divine: Principal Broker / Owner Divine NW Realty

My work is to help people buy and sell their homes or investment properties. How can you use my lifetime of real estate experience to help you reach your goals of buying a new home or selling the home you love? What can I offer you to make your experience more productive and less stressful?   Exposure to available housing as soon as possible* Competitive Market Analysis and Pricing information* Investment property analysis* Current market knowledge* 30 years of experience in buying and selling real estate* Professional negotiation skills* Extensive network of resources to smooth the wrinkles in any transaction.   My promise to you is to give you the best, most professional, service available to help you accomplish your goal, just as I have done for many other happy clients. I will put YOUR business first! Return your calls, answer your concerns, provide resources and trustworthy counsel so you so you can make the best decision for you and your family, honor your time and money, exceed your expectations. 

..the Fannie Mae pendulum is swinging the changes below at us….

Interest-only loans and amortizations greater than 360 months will no longer be eligible.

• 7/1 and 10/1 ARMS will qualify at the greater of the fully-indexed rate (index+margin) or the note rate.
• 6 month to 5/1 ARMS will qualify at the greater of the fully-indexed rate or note rate + 2%.
• MAXIMUM 95% Loan-to-values. (no more 97% LTV mortgages)
• Deed-in-Lieu Foreclosures or Pre-Foreclosures
  • The lender will need to document that the event was completed 2 or more years from the credit report date.
• Bank statements will be needed covering a 2 month period (as compared to 1 month presently).
• Credit reports will be good for 4 months.
• Quarterly asset statements will be good for 4 months.

What does all this mean to you? Your 800 plus credit scores will no longer trump amended tax returns or self employed income. Your financial records will be scrutinized under a magnifying glass. So…qualify every deposit into your bank account and don’t use your credit cards if you plan on making a real estate purchase.

I am seeing some great properties for sale in close in neighborhoods in POrtland Oregon. These homes are compact, have hardwood floors, dry basements and sunny yards.  The Portland market is kind of active right now, and I expect that to be the case through the second quarter, but after that I predict a flat market for the next 18 to 24 months.

Access to affordable loans and low down payments plus underwriting constraints will dampen the market here, especially the condo market. None the less, you have to live some where, and if you shop carefully, you should be able to find excellent value in close in neighborhoods.

I recently was asked how to use private funding to buy a home so I thought I would put up some basic information about this form of lending.  We haven’t seen much of this since the early ’80’s, but when money gets tight then people get creative. I am not a lender, but here are some suggestions for how this might work if you want to explore this type of lending.

First, let me assure you that I am not a lender, and I encourage you to get the advice of your own financial advisor and also an attorney before you go forward with anything like this. I am just providing an insight for you to start thinking about this if it interests you.