What NOT to do when trying to qualify for a home loan | The Boutique Real Estate Group

We get so caught up in the moment!   Is there granite on the kitchen counters?  Is the master bedroom big enough?  Is there grass in the backyard for our dog?  And we have not even closed escrow yet and we are shopping for furniture, buying new cars and opening up new credit cards to fill the new house!  YIKES!!!

Here are some helpful tips on what NOT to do when buying a new home or when you are trying to qualify for that new mortgage…

1) Do not open, close, or extend credit lines/limits once you are formally in escrow.

2) Refrain from having any inquiries to your credit 90 days in advance of applying for a mortgage as all inquiries must be explained to the lender in writing and all inquiries reduce the borrower’s credit scores.

3) Since you must disclose all new accounts that are opened during the escrow period, it is important to not open any new trade lines during the entire escrow period. Only after the loan is recorded, is it “safe” to open a new account or extend the credit limit on an existing account.

4) To play it safe, discuss your debt ratios with the loan officer to see if making any type of a purchase will negatively impact your ability to qualify for the loan.

5) Most appliances, furniture, and decor purchases are larger than normal purchases so it is safer to refrain from doing this until the loan is recorded.

6) Please note that lenders typically run an additional credit report before the loan funds. The intent is to see if there is any new debt that now appears. All new debts must be re-evaluated and explained and this may have a negative impact on the borrower’s ability to qualify.

For more info on the right loan for you please call Allycyn Bennett at United American Mortgage Company at 949-717-7290 or email her at abennett@uamco.com

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Half of All Homes Are Being Purchased With Cash

 

52 Ovation, Irvine, Ca 92620

52 Ovation, Irvine, Ca 92620

 

Story Via WSJ Real Estate News

August 15th, 2013

More than half of all homes sold last year and so far in 2013 have been financed without a mortgage, according to an analysis by economists at Goldman Sachs Group.

The analysis estimates that around 20% of all homes sold before the housing crash were “all-cash” sales (or around 30% of sales by dollar volume). But over the past seven years, the all-cash share of sales has more than doubled, increasing by more than 30 percentage points, according to economists Hui Shan, Marty Young and Charlie Himmelberg.

The Goldman study analyzed home sales figures from the Census Bureau and the National Association of Realtors and mortgage-origination data from the Mortgage Bankers Association and Lender Processing Services.

The surprisingly large cash-share of purchases helps to explain why home sales have jumped over the past two years despite more muted increases in broad measures of new mortgage activity, such as the MBA’s mortgage application index.

There’s no exact way to know who is responsible for all of these cash purchases, though they are likely to include some combination of investors, foreign buyers, and wealthy homeowners that don’t want to go through the hassle of getting a mortgage before closing on a sale. Mortgage lending standards have sharply tightened up since the housing bubble, with banks scrutinizing borrowers’ tax returns and bank statements to verify their incomes and the source of their down payment.

The Goldman analysis also estimates that around 44 cents of every $1 of homes sold currently is being financed, compared to 67 cents before the crisis.

Purchase-mortgage origination volumes have fallen from around $1.5 trillion in 2005, when the housing market peaked, to around $500 billion in each of the last two years.

While declines in the volume of homes being sold accounts for some of the decline, the Goldman economists estimate that around 40% of the decline is due to the drop-off in the amount of financing per home.

The Goldman analysis estimates that purchase-loan volumes will rise to around $750 billion next year and to $1.1 trillion by 2016.