As we celebrate Veteran’s Day today, I want to extend my personal thanks and gratitude to all the servicemembers who have served (and currently serve) our country. In too many cases, they’ve paid the ultimate price to protect our freedom and our lives. That selflessness does not go unnoticed and I salute them.
Now that the elections are behind us and there are just 43 days until Christmas and less than 50 days to 2013, there is an undeniable sense of urgency in the air. Beat the crowds, shop early while supplies last, you know the drill.
In real estate, our goal is to move fast because the longer a transaction is open, the more things can go wrong. If you’re buying a home and paying cash, the seller wants “current” proof of funds and will ask for this every 30 days (especially in a short sale.) If you can’t provide the proof, your offer can (and will) be cancelled.
If you’re getting a mortgage, your loan has to be approved through underwriting, which is the last major hurdle before closing. In today’s world of privacy and discrimination laws, who would think that being pregnant could jeopardize buying a home? Here are six reasons you could be declined for a mortgage:
Maternity leave – the problem isn’t being pregnant. If you’re on maternity leave during underwriting, you’re not working and have no paycheck. Since the lender cannot confirm your current income, you will be denied loan approval if you’re an applicant for the mortgage.
The solution? If you’re expecting to give birth before you close on a home, let your lender know at the time you’re filling out the mortgage application so they can explore possible alternatives.
Workmen’s comp and short-term disability – it all comes down to verifying income. These two sources of income can’t be guaranteed for an extended period of time (3 years or more.)
The solution? If you’re injured during the buying process, let your agent and lender know right away.
Retirement – For folks who are buying a home when they retire, it seems like a no-brainer to use your retirement check to pay your mortgage. The problem is timing.
The solution? Make sure you’re receiving your retirement pay (social security, pension, annuity disbursements) before closing.
Note income – Upon the sale of a business, many owners make arrangements to be paid out over time.
The solution? The terms of the sale need to be that you receive payments for a minimum of three years at the time of closing of your home.
Child support and alimony – Child support and/or alimony can be used as a source of income to qualify for a mortgage. If either source ends in less than three years, you will be denied loan approval.
The solution? Let your lender know the details of your settlement and when payments end in order to determine if this is a viable source of income for consideration.
Nobody wants a surprise at the end of the home buying process. Make sure you communicate any of the above circumstances, which might impact your loan approval.