Buyer Tips & Information

You are filled with excitement about the largest purchase you will ever make. Take a deep breath and slow down just a bit. There are common pitfalls too many buyers make on the road to homeownership that may impact your loan approval!

What NOT to do When Applying for a Mortgage

  • Any new debt can negatively affect your credit score and ability to qualify for the loan you want. This is in the form of in-store credit, mailer offers for credit cards, auto loans, or personal loans.

    Do not cosign for a loan as this is reported as new debt to you as well.

    Do not close any credit cards. This can decrease your credit score by as much as 35 points per card.

    Buyers beware: Lenders can pull another credit report 3-5 days prior to closing to ensure no new credit has been established.

  • Most of the time, deposits into a checking/savings account must be verified by source and can become a problem if the source is not acceptable, i.e. cash is not considered an acceptable source of funds because its origin cannot be verified.

    Buyers should consult with their lender regarding how to document gift funds from a relative, prior to making a deposit.

  • A change in job, unless it is with the same company and is a salaried position, can jeopardize loan approval. Lenders are looking for job history and consistency of employment as they evaluate a loan request.

    Don’t make a change from salaried to commission. Commission or bonus income must be averaged over a two-year period and buyers must have a history of earning income this way.

    Don’t make a change from full time employee to a contract employee, even in the same company. Contract employees are subject to either a minimum three-year contract or a two-year history of contract employment.

    Do not quit your job the day before closing or tell your lender you are quitting your job. They are basing your approval on your employment status and income at the time of application. A lender can terminate a loan application any time during the process if they find you have quit your job.

The mortgage application process can take a month or more! To make this time smoother, avoid moves that could jeopardize your loan approval. A little patience in the final weeks will result in a smoother, quicker closing - and the joy of homeownership!

Local Loan Programs

Not all mortgages are created equally.  For each buyer they have unique needs in a loan that fits not only their budget but the actual purchasing of the home.  The loan programs below are not all of the programs available but represent options for all kinds of buyers.

Keller Mortgage

Keller Mortgage is new to the mortgage world.  They have innovated the process by eliminating a mortgage application being handled by several different people.   They also have eliminated origination fees and lender fees.

  • Fully underwritten pre-approvals

  • We don’t guess, We verify

  • We don’t do it later, We do it up-front

  • A Pre-Approval that sellers can trust

  • It’s simple, it’s fast, and it’s all online

Fairway Mortgage

Whether you’re looking to buy, build or refinance your home, their experienced mortgage professionals are there to help. Fairway Independent Mortgage Corporation offers a variety of loan options that can help you achieve homeownership with the speed and service you deserve. In addition, their mortgage professionals are dedicated to finding the right loan with great rates, terms and costs to meet your specific needs.

Financing a home is one of the biggest commitments you will ever make - you can expect Fairway to guide you throughout the entire loan process from application to closing and beyond.

NC Housing Finance Agency

The North Carolina Housing Finance Agency is a self-supporting public agency that finances affordable housing opportunities for North Carolinians whose needs are not met by the market. Since its creation in 1973 by the General Assembly, the Agency has financed more than 269,000 affordable homes and apartments, totaling $21.2 billion.

The Agency provides financing through the sale of tax-exempt bonds and management of federal tax credit programs, the federal HOME Program, the state Housing Trust Fund, and other programs.

 

Research your loan options carefully.  This is a decision you have to feel informed and confident over for the next 20 years or more!

Pre-Approval. The 1st Step

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

 

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

 

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

 

  • Your current and future ability to make your payments

  • The money, savings, and investments you have that can be exchanged quickly for cash

  • The home, or type of home, that you would like to purchase

  • Your history of paying bills and other debts on time

 

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

 

Bottom Line

Many potential home buyers overestimate the down payment and credit scores necessary to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so.