Michael Shotnik
Branch Manager
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FROM OUR BLOG
July 24, 2017

What to avoid when buying a home?

We want you to be well informed before even beginning the process of buying a home so you’re fully prepared when the time comes. Buying a home can be a rigorous process and there are things that you want to avoid. We’ve put together a list of things that you want to avoid, some of them are myth busters.  Making the home buying process as easy and seamless as possible for you is our top priority!

1-Marijuana is your source of income.

Though marijuana use and cannabis is legal in the state of Colorado and a few other states now, it is still against federal law. Therefore, it’s not an acceptable form of income to Fannie Mae, Freddie Mac, and FHA. As a result, your options are limited; perhaps finding a family member to help with qualifying to buy a home is an option. 

2-Don’t assume you won’t qualify for a loan if you change jobs

Changing jobs is not a deal breaker when buying a home, per se. However, it doesn’t help when you’re looking to buy a home. Lenders are looking for borrowers who have reliable income and a job change shows instability. If you’re switching jobs, but staying within the same field and making a comparable change, you might not have any trouble. If you’re looking to change careers, that could create some challenges. 

3-Don’t assume you can’t qualify because you’re self employed

There’s an assumption that if you’re self-employed, you can’t get qualified for a loan. That just isn’t the case. However, it does require a little more work and organization to get approved. First, make sure you have your paperwork prepared. You’ll need a minimum of 2 years worth of tax information. Be sure to choose your years carefully, showing two years that have a decline in income won’t be helpful in getting approved.

4-Don’t work with a broker or local bank, ensure your lender is a direct lender, aka “mortgage banker”

You don’t want to trust one of the biggest investments of your life to an under qualified loan officer.  You could have the misfortune of them disregarding or misunderstanding dates/deadlines within contract or extending underwriting times. Further, many do  not communicate after hours; which could lead to problem. Additionally, brokers and local banks can result in increased rates/costs.  Frequently, working with brokers or local banks have heavy loan conditions, which basically means you will need a lot of documentation to support your qualifications.

5-Don’t get too risky with the rate, lock early in the process

 You may take risks in other parts of your life, but you don’t want to gamble with rates. Lock them in early in the process so you don’t get stuck with a higher rate if rates increase.

6-Don’t wait to order the appraisal, order as soon as able

In order to accommodate the dates/deadlines in the contract, ordering the appraisal early is crucial.  Not only does this allow for a smooth process, but it puts all parties at ease.

7-Don’t drag your feet on submitting documents, submit all docs before going under contract

It’s best to get all of your documents in early, that way if there are any questions or any additional documents are needed, we can get them taken care of without jeopardizing missing deadlines.

8-Don’t do all your communication via email and phone, in person meetings are great

This is a big process, buying a home. So much can be lost or misunderstood via email or even on the phone. There’s a lot of paperwork involved, as well. In person meetings are, in our opinion, the most effective way to work through this process.

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Sierra Pacific Mortgage Company, Inc. dba Colorado Mortgage

Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Regulated in Colorado by the Division of Real Estate #988320. To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.