Quote of the Day

Real estate is at the core of almost every business, and it's certainly at the core of most people's wealth. In order to build your wealth and improve your business smarts, you need to know about real estate. 

~ Donald Trump

Six Must Haves for Mortgage Approval

Interest rates are hovering around historical lows, and low interest rates increase affordability, making it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender's strict underwriting are all too common.

Some buyers are turned down for illogical reasons. For instance, if you have investments -- even if they're performing well -- an underwriter might deny the mortgage because your portfolio doesn't fall into the underwriter's risk assessment model.

One couple was turned down because the husband had worked at his current job for less than a year -- even though he was making more money at the new job than he was before.

These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late. 

Generally, it's more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.

You could run into underwriting problems if you're self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won't lend to buyers who have more than three or four residential properties.

If you're buying a new home before selling your current home, you'll need to have 30 percent equity in your current home. This needs to be verified by the lender's appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month's rent to verify rental income if needed to qualify.

HOUSE HUNTING TIP: As soon as you're serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don't make your selection based on interest rates alone. A good track record counts for a lot.

Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you're not turned down at the last minute, it's worth it.

Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you'll need to do to satisfy the underwriter.

Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won't be included as livable square feet.

If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.

There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.

THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.

Dian Hymer is a real estate broker with more than 30 years' experience and is a nationally syndicated real estate columnist and author.

FOR SALE: 1938 Bungalow in Downtown Templeton

This terrific 1938 bungalow is located in downtown Templeton, California at the corner of First & Main. Currently used as an office, this quaint property offers hardwood floors, coved ceilings, arched doorways, plaster walls, and a remodeled period style restroom. It has recently been painted with updated wiring and insulation. Exterior features include great visibility, custom concrete walkways and patio, landscaping, 2 beautiful heritage oak trees, garage, shed, and a large parking lot.

100 S. Main in Templeton has amazing potential. Contact your favorite Comet Realty agent to see the inside! 805.546.9925 or Info@CometRealty.com.

THE POSSIBILITIES ARE ENDLESS! 


This is currently listed with Shannon Fitzpatrick, who can be reached at 805.801.5436.

Happy Holidays 2011!

Getting Ready to Buy a Home? Lender Do's & Don'ts

There are 4 things you should avoid doing prior to submitting a loan application, or during the loan process, according to Kevin Hauber of iMortgage. Any one of these things can greatly impact your ability to qualify for a mortgage loan, so it is critical to avoid doing any of these until AFTER your loan has closed escrow.

DO NOT PAY OFF BILLS
Your loan officer will advise you if it is necessary to pay off bills to help you qualify for a loan. They will also show you the best way to pay off bills to make sure we have the evidence we need to prove that the bills have been paid.

DO NOT CHANGE JOBS
Changing jobs before or during the loan process can create a real problem in qualifying you for a loan, particularly if the job is in a different line of work or at a lower rate of pay. During the loan process, it can also create time delays as the new job will need to be verified.

DO NOT MOVE YOUR MONEY
It is best to leave your money right where it is until your loan is closed. Moving your money toa new bank or even into a new account can wreak havoc with the verification process.

DO NOT MAKE MAJOR PURCHASES
Many borrowers make the mistake of buying a new car, some furniture, or making another major purchase without realizing the impact it can have on their ability to buy a home. A large monthly payment can affect the amount of home you qualify for and, during the loan process itself, actually make it extremely difficult to get your loan approved.

If you must do any of the things listed above (even if you've just been pre-qualified for a loan), contact your loan officer. They can help you by re-qualifying you if necessary and advise you of your options. By avoiding these four things, you can look forward to a successful loan closing.

For excellent service, contact:

Kevin Hauber
iMortgage
Direct Line 805-597-8844
Mobile 805-459-8844
Email Kevin.Hauber@imortgage.com

Tim Townley is REALTOR of the Year!

The REALTOR® of the Year award is actually one of the highest awards that can be bestowed upon a REALTOR®. The award is presented annually and the member is nominated by his peers. The criteria taken into consideration are the member's involvement in leadership, civic affairs, participation in local, state and national committees with the California Association of REALTORS®, as well as the National Association of REALTORS®. Also taken into consideration is the member's spirit, attitude, dedication to their clients, and business accomplishments.

Comet Realty is honored and thrilled that this award has been given to our very own Broker/Realtor TIM TOWNLEY.

Way to go, Mr. Townley. Now the world knows what Comet Realty has known all along. You truly are REALTOR® of the year!

For outstanding service, Tim Townley can be reached at 805-440-8735, or Tim@CometRealty.com. 

For Sale: 1009 Jacqueline Place, Nipomo

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Call any of Comet Realty's amazing agents today to see this amazing home!    805-546-9925