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Lending Boo Boo's and Now is the Time to Buy a Home


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Blog by Doug Ingersoll | April 11th, 2016


The table above provides a concise statistical summary of today's residential resale market in the Phoenix metropolitan area.

Have you ever lost a deal because the financing fell through?
 
The latest lending requirements are designed to protect buyers, the lending industry and the real estate market.  This can mean a complicated loan application process for buyers of which they have very little control.  Empower yourself and your clients - Discuss the five most common mistakes that can put loan approval at risk.  Potential risks most often are uncovered right before closing and after everyone has loaded up the moving truck.  Take time to educate your clients before the loan application begins.
 
❐  DO NOT CHANGE YOUR MARITAL STATUS - How you hold title is affected by your marital status. Be sure to make both your lender and the title company aware of any changes in your marital status so that documents can be prepared correctly.
 
❐  DO NOT CHANGE JOBS - A job change may result in your loan being denied, particularly if you are taking a lower-paying position or moving into a different field. Don’t think you’re safe because you’ve received approval earlier in the process, as the lender may call your employer to re-verify your employment just prior to funding the loan.
 
❐  DO NOT SWITCH BANKS OR MOVE YOUR MONEY TO ANOTHER INSTITUTION - After the lender has verified your funds at one or more institutions, the money should remain there until needed for the purchase.
 
❐  DO NOT PAY OFF EXISTING ACCOUNTS UNLESS YOUR LENDER REQUESTS IT - If your Loan Officer advises you to pay off certain bills in order to qualify for the loan, follow that advice. Otherwise, leave your accounts as they are until your escrow closes.
 
❐  DO NOT MAKE ANY LARGE PURCHASES - A major purchase that requires a withdrawal from your verified funds or increases your debt can result in your not qualifying for the loan. A lender may check your credit or re-verify funds at the last minute, so avoid purchases that could impact your loan approval.

From Heidi Dombrowski, Branch Manager
20860 N. Tatum Blvd., Ste. 100 
Phoenix, Arizona 85050 
Office: 480.515.4369 Fax: 866.303.1932 
Email: hdombrowski@firstam.com  | Website: http://www.ThinkFirstAmerican.com

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates have stayed near historic lows. Sellers should realize that waiting to make the move when mortgage rates are projected to increase probably doesn't make sense. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain budget for your monthly housing costs.

Here is a chart detailing this point:
purchasing power.jpg
Don't Wait! Move Up To Your Dream Home Now! | Keeping Current Matters According to Freddie Mac, the current 30-year fixed rate is currently around 3.75%. With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, by $10,000). Freddie Mac predicts that mortgage rates will be closer to 4.7% by this time next year.
Act now to get the most house for your hard-earned money.