If you are buying a home in Los Angeles read another great post from Gene Mundt, Chicago mortgage lender, about the necessity of talking to a lender.
As a Mortgage Lender, one of the most important messages I impress on area Home Buyers/Owners is one regarding timing … the timing of when they should contact me when Buying a Home or Refinancing.
If you’ve read a few of my past posts, you’ll know the topic of timing is a drum I beat loudly and often. My rule of thumb regarding proper timing is …Once you’ve contemplated home ownership or refinancing, you need to get to a Mortgage Lender!
Below is a good example of why I believe this message is so important …
I have a client that I’m working with right now. He’s young, hard working, a saver not a spender. He paid off his Student Loans early. Saved up and bought a moderately-priced used car to avoid car payments. Thinking he was doing the right thing, he’d paid off almost all debt he’d acquired prior to seeking my mortgage services. And he’d saved up a sizable Down Payment for his new home. His MIDDLE credit score is 795. Yep … 795!
Sounds like the perfect dream Borrower, doesn’t he? Sounds like he’s done everything right, doesn’t it? And yes, he has.
Except for …
In the current lending environment, having 3 open credit lines is the “gold standard” by which a Borrower is held and examined by Underwriters, especially if the client will need Private Mortgage Insurance or want a second mortgage. You have to be in debt and show you can handle that debt wisely to be considered worthy of more new debt.
So at this point if you’re thinking “here comes the kicker” regarding my young client … you’re right. He doesn’t have 3 credit lines open. He has only 1 credit card right now. It has a very very tiny balance. And he uses it extremely seldom.
Now as a grandfather, I’m hoping this young guy is still available when my grand-daughter is ready to marry. His head is on straight regarding financial matters. But as his Mortgage Lender??
This isn’t an insurmountable problem. We have found a solution and are working around the insufficient number of credit lines. A little bit of time … a little bit of extra effort and all will be well. But it will cost him some extra time .. a it will take a little bit of extra effort to put a solution in place, and he will have to put 20% down to avoid the Mortgage Insurance underwriting guideline mentioned above.
Hearing that message was somewhat confusing to my Buyer. It certainly wasn’t a message that my Buyer or his Agent was prepared for or wanting to hear. Especially given they’ve already started viewing homes.
“Sooner than Later! Sooner than Later! Sooner than Later!”
Why? Had this young, seemingly well-positioned perfect Home Buyer come to me earlier in his home buying process, we would have discovered and tackled his credit issue … his credit “blip” … immediately. And that would have eliminated any stress factor he faces now and erased any delay placed in his home search.
Now I know that there will be some that say common sense has flown out the window regarding mortgage financing. And I understand that viewpoint. But agree or disagree, it doesn’t change the current rules to which we are subject. Borrowers must comply to Close successfully.
To navigate through Underwriting cleanly and quickly, today’s Home Buyers must be “positioned”. Buyers must come to think of that “positioning” as their personal recipe for success. A recipe where the proper ingredients … the proper seasoning … must be measured and added in the exact right amounts … then baked for the right amount of time.
Ahhh … there’s that reference to timing again!
As I said above, this young and deserving client will buy and finance his new home successfully. But the glitches and blips he encountered along the way could have been avoided if we had talked earlier.
So, if you’re thinking of buying a Will County or Chicagoland home now … or in the future … contact me immediately. Remember … “Sooner than Later” is preferred, pro-active, and wise. Get informed and educated sooner than later. Get your credit checked sooner than later. Polish and spruce it up sooner than later. And give yourself enough time to act upon your Lender’s recommendations.
Do You Possess the Perfect Recipe to Become a Home Buyer? Potential Will County and Chicagoland Home Buyers need to prepare their financing “recipe” perfectly and well in advance of starting to view homes. Doing so increases and strengthens bargaining positions with Sellers. When this important step is done, Buyers can respond and act quickly when they find their perfect home …