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It won’t seem strange to most to know that we will be assessing your income situation when you apply for a home loan. The average person believes that it makes sense that we know you have the capacity to repay a long-term monthly obligation like a mortgage with reasonable amount of verifiable monthly income. There are however, a number of different things that most home buyers don’t understand about income qualifying for a mortgage. There are things we count and things we don’t count when considering your income and a few of them may surprise you!
In our office, we have an on-going theme that surrounds reminding each other to have an attitude of gratitude. On this Thanksgiving Day, I thought it appropriate to express my gratitude to those who continually come to me for wisdom regarding their finances.
As promised, some additional guidance came out last week surrounding the newly reformed Fannie Mae and Freddie Mac underwater refinance program. Unfortunately, as I imagined, it will likely still be a while before it’s actually available under the new terms by investors.
There are revisions coming to the Fannie Mae and Freddie Mac underwater refinance program that may be of value to you. They have passed lifting the loan-to-value limitation previously set at a maximum of 125%. In simple terms, this means you owe more than 25% more than your house is worth.
Whether you’re thinking about buying a home now or a year from now, the right time to visit with a mortgage professional about your financial situation and is as early as possible. Our objective is to make the home loan process and getting a mortgage as seamless as possible for you. There are some sure fire ways to make it more stressful and we would rather speak with you before you make some common mistakes that could make getting a mortgage more challenging.
In terms of mortgage loans, it’s important to understand that while there are a large variety of mortgage loan programs, and most of them fall into a few underlying loan program types. These program types all have various qualifying standards and down payment requirements as well. While the media would have you believe that you need mega down payment to qualify for a home today, that’s simply not true. There are still zero down and minimum down payment programs available for you to purchase a home.
Even within these three categories, it’s important to know that not all lenders have access to all of the same products and programs or have different policies that prohibit them from doing things that another lender could do for you as a borrower.
As I take a large number of loan applications on a weekly basis and I teach First Time Home Buyers in our monthly Free First Time Home Buyer Class, there is a theme of misunderstanding and a belief that credit score is the only thing that matters. While that may have been the case in the past, it most certainly is not the case today.
That’s right, two weeks from today; we will host our 7th Annual Fall Festival at Cornerstone Mortgage Company in Burnsville. This event benefits our local Dakota County, Scott County and Carver County CAP Agency Food Shelf and Thrift Store! Bring your non-perishable food items, and gently used winter clothing and enjoy an afternoon of FREE fun for the whole family!
I often write about the things to do when you’re preparing for a mortgage and was recently reminded of the importance of pointing out the “DO NOT” do items. These are items that could prevent you from closing on your home, or best case scenario cause you additional paperwork and detail that you need to provide in order to gain a loan approval. Whether you’re a first time home buyer or an experienced home owner, this list is important for you because the rules of the mortgage game have changed in recent years. Knowing the rules and how to work inside them can make a big difference for you.
Watch this video for information on the upcoming First Time Home Buyer Class
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