SURVIVOR GUIDE FOR REAL ESTATE BUYERS ~ PART 2
Buying a home Using Financing
As a South Florida Listing Broker, I often hear from Buyers who are sad and frustrated that they can’t get into a property or can’t close. Most of the time the issues giving Buyers difficulty getting into a home are avoidable.
Survivor Guide For Real Estate Buyers Part 1 addressed the real estate aspect of buying a home with a tip for cash Buyers, and now part 2 gives important tips to financed Buyers. Being that the vast majority of Buyers are financed, and that there are some real complications that can come up with financed offers, I believe that the 7 tips below are crucial to helping financed Buyers get under contract. These tips will also help in keeping the transaction as smooth as possible and getting to the closing table.
Buyer Tip #1: Vet who you hire: Lender.
1) Just as with hiring a REALTOR, hiring the right lender and loan officer is also key. Who you use as your lender is so important that there are two tips! Along with going with a local lender, it’s important that you call around and speak to a few of them to see who is the best fit for you. Ideally you will find a lender who has experience, who is reliable, who is accessible, who works in a timely manner, and who cares about your file instead of treating you like a number. Ask to speak with previous clients, look for online reviews, ask the loan officer as many questions as you need to feel comfortable.
Buyer Tip #2: Keep it local.
2) Get a pre-approval from local lender because they can close sooner and are accessible. We don’t care which local lender you use, just please use a local lender instead of one of the larger lenders. I don’t have anything against the larger lenders, I’m just trying to avoid issues with getting to your closing. Fact of the matter is that local lenders are more accessible for any questions or issues, and they can close in a lot less time than the large banks. Larger lenders also usually require more than 30 days to get your loan ready, which is an issue especially if you’re buying a short sale that has given the usual 30 days to close. Avoid putting yourself in a stressful situation by working with a local lender from the very beginning.
Buyer Tip #3: Put Your Pen Down and Leave Your Credit Alone.
3) Once you have been pre-approved for a loan, please don’t apply for credit of any kind…buying new furniture, cosigning for anyone, buying a new car, etc. Applying for any credit at all will hit your credit score negatively, and that isn’t something you want to do while in the process of purchasing a home.
Buyer Tip #4: When Shopping is Not a Pleasure.
4) Don’t use any of the money you used to get the pre-approval letter. Please, please don’t take out any of the money you showed to obtain your pre-approval until you close. Any money that is taken out might need to be explained and investigated by the underwriter, and it might affect the amount you need to close and your ratios.
Buyer Tip #5: No Mystery Banking.
5) Don’t make withdraws and deposits in any of your accounts that are out of the norm. Of course routine/regular deposits are fine, but keep in mind that unusual withdraws and deposits trigger investigations by the underwriter, that once again, can add complications and extra time getting to your closing.
Buyer Tip #6: Don’t Play With Your Money.
6) Don’t open or close any bank accounts, move money around between your accounts, or move money from your account and someone else's accounts. You may think that something like transferring a bit of money into your child’s account to help him out while she’s away at college is harmless, but again, this will trigger an inquire by the bank’s loan underwriter.
Buyer Tip #7: Not all Financing Types are Created Equal.
7) FHA buyers are having an extremely difficult time purchasing homes in this market, sellers are looking for conventional financing and often are not even willing to receive an offer where the buyer is obtaining a FHA loan. It is a good thing that most lenders are again offering conventional financing with less than 20% down payment!
For More Tips, Please Read
Getting a loan? Read this first: