When you’re ready to get a home loan, it can help to have as much information about the mortgage process as possible. That way you can take the right steps towards getting your loan, and hopefully avoid some of the more common pitfalls along the way. To help you reach your goal of homeownership, here’s a list of dos and don’ts as you start with the process of getting a home loan and buying a home.
Keep All Records in Good Order.
Availability - Keep your financial records close at hand in case updates are requested.
Income – Be aware that underwriters typically verify your income and tax documents through your employer(s), CPA, and/or IRS tax transcripts. Hold onto new paystubs as received.
Assets – Continue saving incoming account statements. Keep all numbered pages of each statement. Ex. 8 of 8.
Gifts – If you're receiving any gift money from relatives, they'll need to sign a gift letter (we’ll provide) and an account statement evidencing the source, which must be "seasoned" funds.
Current Residence – If you're renting, continue paying your rent on time and save proof of payment. If you're selling your current residence, be prepared to show your HUD-1 Settlement Statement. If you'll be renting your home, you may need to show sufficient equity, a lease and receipt of the first month’s rent and security deposit.
Keep your credit shining. Continue making payments on time. Your credit report may be pulled again, and any negative change to your score could cause you to lose your approval and your home.
Understand that things have changed. Underwriters require more documentation than in the past. Even if requests seem silly, intrusive or unnecessary, please remember that if they didn't need it, they wouldn't ask.
Apply for new credit. Changes in credit can cause delays, change the terms of your financing or even prevent closing. If you must open a new account (or even borrow against retirement funds), please consult with me first.
Change jobs during the process. Probationary periods, career or even status changes (such as from a salaried to a commissioned position, leave of absence or new bonus structure) can be subject to very strict rules.
Make undocumented deposits. Primarily large but sometimes even small deposits must be sourced unless they are identified. Make copies of checks and deposit slips. Keep your deposits separate and small. Avoid depositing cash.
Wait to liquidate funds from stock or retirement accounts. If you need to sell investments, do it now and document the transaction. Don't take the risk that the market could move against you leaving you short of funds to close.
Ever be afraid to ask questions. If you're uncertain about what you need or what you should do, Greenway Mortgage is here to help you through the process, even long before you intend to buy.
A typical home payment has not changed much in the last dozen years. Incomes have risen, and slightly higher payments can actually be easier to afford than they were back then.
At the current level, a median priced home is probably well within reach of a family earning close to the median income.
Want to learn more? Ready to make a move?
We’ll be happy to help you determine a payment and purchase amount that work for you. Please reach out.
We may not be comparing real apples and oranges, but we’re coming pretty close in the home financing industry. And if you’re at all interested in using your home’s equity to access cash, then this comparison is for YOU!
There are two common ways to get cash from your home—a Home Equity Line of Credit (HELOC) or a cash-out refinance.
In the current environment, many people want to keep the great interest rate they already have on their home loan, so they automatically choose a HELOC over a refinance. But wait—there’s a big difference that can make the benefits hard to compare at a glance. HELOCs have adjustable interest rates, whereas most home loans are fixed.
So, is it better to use a Home Equity Line of Credit or to do a "cash out" refinance despite a higher interest rate? Find out by watching our helpful interactive video here and by using our comparison calculator.
And, if you’re interested in exploring your options more, please reach out. We are happy to help! Fill out the form below and one of our loan officers will be in touch shortly!
Over the past few years, two trends have emerged in the housing market:
Home renovations have shot up
Inventory of homes available for sale on the market has dropped
A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.
This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs.
According to Home Advisor, homeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers.
A new study from Zillow asked the question,
“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?”
Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.
More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home.
If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run.
With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would.
If you're thinking about renovating, contact us today or visit out Renovation Page for more information.