Avoid These Mistakes that Delay Lender Approval

If you’re getting ready to buy a home, you’re likely realizing that one of the most important parts of the process is getting approved for a mortgage that works for you. To get the best rate and avoid losing your deposit, steer clear of these common mistakes.

Leaving out details from your financial profile.

The best way to avoid doing this is having a great mortgage lender. Making sure you include not only your basic information, employment and living history, income, assets and debts, but also ensuring you answer every single question. Leaving details out of your profile can throw off the entire process, so having someone who is meticulous enough to make sure all your information is made available is key.

Assuming pre-approval is equal to actual approval.

Pre-approval for a mortgage means that you’ve talked to a potential lender or maybe even provided some documentation that gave the impression that you will be approved for a certain amount. Don’t be confused - this is not an actual approval. You need to make sure your loan is approved by an underwriter before making any offers to buy a home. When you are “underwriting approved” you will be able to get a formal loan commitment. Without this document, there is no proof of actual approval, meaning that your profile has been evaluated but nothing official to show approval.

Failing to provide every single piece of documentation needed.

Your lender is going to want very detailed documentation of your financial profile, including the following:

- Pay stubs covering 30 days

- Tax returns & W-2s

- YTD business financial statements (if you’re self-employed)

- 2 months of statements for all your asset accounts

- Explanations and paper trails of all deposits withdrawals over $1,000

- Full financial information on any other homes/businesses you own

You will need to provide all these documents, and if you have a commissioned or variable income, you will need to give permissions to your lender to verify that income. Your credit will be run, which can expose any information you didn’t disclose.

Not knowing enough about mortgage rates.

Once a seller accepts your offer, you will be in contract on that home and you will be ready to lock in your mortgage rate. You cannot lock your rate until you’re in contract, which means that any rate market movement can impact you until then. Rates change throughout each day, and they are priced based on how long they are locked. A shorter lock, about a month or less, will have a lower rate than a lock of 60+ days. If you want to avoid any surprises, talk to your lender and ask them to use your closing timeline to quote rate locks.

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What to Negotiate When Buying Your First Home

Whether you are a first-time homebuyer or a seasoned veteran, the negotiation part of the transaction can be a little daunting and stressful. However, it is necessary to ensure you are getting the best possible deal for your money. So, what should you negotiate when buying a home?

1. Closing costs.

Your closing costs are determined by a variety of factors, but you can expect it to be between 2% to 5% of the purchase price. Ask the seller to cover some or all of the closing costs upfront or request a closing credit that can be used to make specific updates and fixes to the home.

2. Furnishings.

Love how the seller has furnished and decorated the home? Buyers often negotiate keeping couches, fixtures, landscaping items, patio furniture, appliances, and more. And many sellers agree, wanting to make the home more appealing.

3. Inspection and closing timing. Buyer offers that include a quick inspection and close timeline are often more attractive to sellers who have been going through the process for far too long. Just ensure you allow yourself ample time to get your financing in place and complete proper, thorough inspections.

4. Home warranty.

Sellers will often agree to pay the premium on the home warranty at closing and then hand it off to the new homeowner, who is responsible for the deductible on any future claims.

5. Repairs.

Your inspection may uncover small or large repairs needed to bring the home up to standard. You can negotiate to have these items fixed before closing or ask for a price reduction to cover the costs.

Ready to buy your first home? Click the application link below to see if you qualify!

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What You Need to Know for Winter House Hunting

While house hunting in the winter was never really a thing of the past, today’s culture keeps things going year-round - which means finding a home can be done at any time of the year.

While exploring in the cold might be your focus or concern, house-hunting in less-than-ideal conditions can show you things you can’t always see on a warm, sunny day. Here are some things to keep in mind as you try to find a home before the holidays.

Winter Weather Can Help You See Hidden Flaws

Even if you don’t love the cold and snowy weather, it can help you see household flaws that you may not see in the warmth of summer. Maybe the windows are drafty or there is a major loss in privacy when the trees are bare from the cold. It will also help you to love your home for its’ bones, and only love it more when warmer seasons arrive bringing flowers, grass, and colorful foliage.

Photos Can Help Fill In The Blanks

It can be hard to picture what a poolside oasis looks like when it is covered in snow. This is where photos can save the day. Whether they are listing photos or images from previous owners, seeing certain parts of the home in better weather may check the final box for a home you are falling in love with.

Know How To Handle Features Unavailable In The Winter

If that pool you fell in love with isn’t operational in the winter, you should request that they leave money in escrow or extend the closing time frame so that you can inspect the pool when warm weather returns. Sellers are responsible for remedying any issues unless they provide a disclosure about some part of the pool not working.