UPBEAT TIMES, INC. • July 2016 • 19 The Do’s And Don’ts Of Buying A Home! by Barry O'Meara • barryo@stearns.com


SANTA ROSA, CA. ~ School is out and summer is here stretching daylight into the night.


Like baseball season,


traditional home buying season is in full swing. Home values con- tinue to rise. Many factors play into this upward trend, but the un-qualified buyers are not one of them. Ever since the financial meltdown of 2008, underwriting for mortgages has gotten tougher and tougher. All loans need to be a Qualified Mortgage (QM) in order to fund. In order to be a QM, everything must be doc- umented, verified, and re-ver- ified.


From income to debts,


everything is scrutinized. Te borrower’s debt-to-income cannot exceed strict limits.


If


the loan does not meet the guidelines to fit QM, the loan won’t be funded. Te underwriter keeps the If the in-


borrowers in check.


come cannot be documented, it cannot be used. Any cash income or income from a non- borrowing spouse cannot be counted. Te only income that can be used has to be paper trailed which has been report- ed on your taxes. Whether you’re buying your


first home or you’re a seasoned buyer, the whole process can be stressful yet a rewarding experience.


Home buying


has always been the cornerstone of building wealth. Owning a home forms a solid foun- dation for


raising


families and build- ing stronger com- munities. Owning a home protects you


from rising rents.


In other


words, it adds stability to our lives. Here are some key steps you need to


verify the income, they can’t use it. Your loan won’t fund. take


when planning on making that move. Get pre-approved and know what you qualify for. It is a competitive market so know- ing how much you qualify for will help is the first step. Tis


Te most important part of that debt-to-income ratio is the income.


come stream consistent. Te other big “don’t”, is incur-


ring new debt. Even though your loan may be approved,


Keep your in-


may seem simple but even the smallest mistakes can cost you a dearly in trying to close your loan. Here are a few things to keep in mind. Don’t quit or change jobs.


Prior to funding a loan, the lender will once again verify employment. Yes, those taxes you showed to qualify for the loan, they will also verify. can’t


If they


the lender will “refresh” your credit prior to funding. Any new credit inquiries will need a letter of explanation stating no new debt. Do not open a department store credit card even if they are offering you 10% discount. Saving 10% on a $200


purchase


could cost you dearly in clos- ing your loan on time.


Don’t buy a car until your loan is closed.


Most car payments can make a huge difference in your debt- to-income ratios.


If you did


a trade-in and they paid off your old car loan that you were qualified on, you will need to re-document your whole debt- to-income ratio. Again, this will add delays to funding your loan. So, if you are planning on


Weird Facts & Fun Trivia - 6


As early as 200 B.C., the Chi- nese were writing on green bamboo stalks and heating it on coals to dry. Sometimes if left too long over the heat, the wood expanded and even burst, with a bang of course. According to Scientific American, Chinese scholars noticed that the noises effec- tively scared off abnormally large mountain men. And, thus, the firecracker was born. By some accounts, fireworks were also thought to scare away evil spirits.


making any moves this sum- mer, keep your credit in check, your income consistent and don’t incur any new debt. As we swing our way through the summer months, let your pur- chase offers be accepted, your financing close smoothly, and let’s see if the Giants will again be successful champions!


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“People tell you that you cannot, because they do not.” ~ Tim Fargo UPBEAT TIMES, INC. • July 2016 • 19


THE MORTGAGE COACH


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