This week I wanted to talk about what goes into making your loan actually work. This is a very relevant topic being how just about everyone who is purchasing a house these days requires a loan.
The first thing people need to do is talk to a lender. A lot of people actually want to talk to a Realtor or see houses before knowing what they can invest. A lender is essentially the middle man between the bank and the borrower and they negotiate the terms and run the figures for the amount being borrowed.
What the lenders are looking at when it comes to your loan is a debt to income ratio. They want to see that you don’t owe more than you make because if you do then on paper you like you might be a great candidate for defaulting on your loan. They will take into consideration a lot of factors such as how much money you make a year, your monthly bills, how long you’ve been employed, your credit history, and if they can resell your loan on the secondary market.
There are things you, as a borrower, need to do in order for a lender to work with you. First, keep your job! Remember they want to see that you owe less than you make, if you quit your job you’re making less, so they will lend you less. Don’t go out and purchase a new car, television, or use any credit at all. They are basing their figures on your current credit score if you go out and use credit that score will change and so will the amount they can lend you.
A lot of people don’t realize how important the credit score is for a lender to work with you. If you have credit issues start to work on clearing those issues up. Work with a lender they can resolve your credit issues much faster than you can by yourself. There’s a difference between prequalified and qualified. Just about anyone can be prequalified for a loan but after a review of all the information those that come out are actually qualified and will receive Lender Letter for the purchase of their new home.
Now you’re qualified and you’ve found the house of your dreams and you’re offer has been accepted. After the inspection you’ll have a chance to ask the seller to fix things from the inspection. These objections will need to be sent to your lender for review. Make sure you don’t go crazy with the objections. As we near close they will send your loan packet off to the underwriters, those that process the loan at the bank, for review.
The lender does not send the loan packet in pieces to underwriting. This means that the underwriter can have conditions of their own for your loan that might come up at the last minute. Be patient, work with your Realtor, resolve the conditions, and you’ll have yourself a brand new home.
If you’re considering purchasing a house in 2013 stop considering and just call me. Rates are at a record low. There has never been a better time in history or anywhere in the world for that matter to purchase a home. 3.5% interest and less on a 30 year fixed loan is unheard of!
Marc Bayes is an Associate Broker for the Colorado Dream House Team for Luxury Homes by Keller Williams, DTC. Contact Marc at 303-619-3052, firstname.lastname@example.org, codreamhouse.com or coloradodreamhouse.com
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