buy a home

The Lender Wants What? Don’t Let Paperwork Discourage You

February 5, 2018 by khproperties Leave a Comment

You’ve found the home of your dreams, got it under contract, and are working with your lender to gather all of the documents they need to make your loan happen. It’s all going perfectly and you’re getting more and more excited by the day. Then the loan hits underwriting and suddenly you feel like you’re buried in paperwork requests. They need copies of this, letters explaining that, printouts of bank account statements from years ago – they ask for strange things that don’t seem related. It becomes a deluge of requests and you feel like just giving up – no house is worth all this paperwork, is it?

It can be discouraging to have to sift through all of your documents and scanning and sending and resending, but all of that paperwork is leading to your new home. Lenders will request things once, twice, three times…it can be a bit frustrating. The underwriter’s job is to mitigate the lender’s risk and part of that involves creating a papertrail so that there are no doubts about what they see when they look at your financial picture. Often it seems like they’re just harassing you, but they are just creating a file that documents why they felt it was an acceptable risk to give you that loan.

Prepare Paperwork for Your Lender in Advance

While you’ll never be able to predict everything the lender will ask you for, you can start preparing the paperwork long before you apply for the loan. Gather your bank statements, pay stubs, tax documents, loan information – anything reflecting your income and your debts. If you have some outstanding issues, know what they are. You can get a free copy of your credit report through www.annualcreditreport.com and check for anything that might show up. Do a household budget (you’ll be surprised where you can save some money!). The more documentation you have prepared, the better.

When the lender starts asking for paperwork, turn it in quickly. It can get a bit frustrating when they ask you for the same thing you’ve turned in 10 different times – just take a breath and resend it. The quicker you turn those items in, the quicker someone can review them. Sometimes there will seem that there is no rhyme or reason to what they’re asking, but to them it makes perfect sense. Don’t question it, just send it in and ask if they need anything else.

image courtesy of isaacbowen

Looking to Buy a Home in a Hot Market?

March 16, 2015 by khproperties Leave a Comment

Be Prepared to Buy a Home

Right now, homes are flying off the shelves in San Antonio. When you’re ready to buy a home in a seller’s market like the one we’re currently experiencing, it pays to be prepared and know what you want and the steps to getting it. Going into the process blind will only lead to frustration and the possibility of not getting the home you want. We thought we’d put together a few tips for those of you that want to buy a home right now and help you get the best results in this hot market.

Work with a Realtor Obviously, we’re biased towards this step, since we are Realtors, but the fact is, real estate agents in San Antonio are here for a reason. We assist you not only in finding the property, but negotiating and walking you through the closing process. We do this every day, so we know the pitfalls to avoid, the current trends in pricing, how to avoid a bad appraisal…the list goes on and on. And when a deal is looking shaky before closing, we will fight to keep the transaction alive, so that you can close on time and move into your new home. We even have some suggestions on how to choose a Realtor that’s right for you.

Get preapproved by a reputable lender. Getting a loan preapproval is something we preach all the time – getting this step taken care of before looking at homes is not only smart, but these days crucial. Knowing what you can afford is the first step to knowing what kind of home we should be looking for. But not any preapproval will do – you should always seek a reputable lender – someone locally preferably. A local lender can make a huge difference – being able to actually walk into an office and talk to someone when there’s an issue can make all the difference. There are places online where you can get quick preapprovals, but time and time again, we see the frustrations caused by these companies. Your best bet to keep things running smooth is to talk to a few local lenders, ask your agent for recommendations, and then sit down with a few and see if they’re a good fit.

Know what you want, but be prepared to be flexible. We hear it all the time, “if only we could take the gameroom from this house and add it to this house and then pick up the whole thing and put it on this other lot over here…” Unless you’re building a new home from the ground up, it’s pretty hard to find every piece of your dream home in one place. Write a list of absolute must-haves, then write a list of would-really-like-to-haves. Sometimes you’ll find an almost perfect home, but it’s missing a few things – consider if you can add those things yourself at a later date. It can be hard to see past some of the things that are missing from a home, but often that’s what you need to do to see the benefits of the home in front of you.

Communicate changes to your real estate agent. Often during the search process, you’ll find that your wish list items change. Be sure to communicate these changes to your agent. It’s very common for buyers to start with one thing in mind and wind up buying something very different in the end. Letting your agent know as these factors change will help them keep the search focused.

Be prepared to take action. When you find the house, don’t delay. A few hours or a day or two can quickly mean you’ll lose the house to another buyer. Now is not the time for mulling things over – while we want you to make the right purchase, we also hate seeing you lose your dream home because you wanted to take a few days to think about it.

Multiple offers are more common at the moment. Be prepared to make a strong offer on the home. Very few lowball offers are making it very far these days. Everyone wants to buy a home for the best price possible, but sellers want to sell for the most they can possibly get for their home. With inventory low and sellers controlling the market, they will win every time.

When the home is under contract and the underwriter asks for documentation – do not delay. The underwriters work for the lender and work to ensure that they should lend you the money to buy the house. It’s all about analyzing risk for them. If they ask for documentation (and they will – probably a lot), don’t delay. Get it to them immediately, even if this is the third time they’ve asked for it. Slowing down the underwriter can be costly and delay closing. A seller does not have a contractual obligation to extend you more time to close on the house…they often will because they’d rather sell the house than start all over again, but they do not have to. Give the lender everything quickly and the process will go much more smoothly.

Don’t let obstacles impede your progress. Sometimes the process of buying a home can be frustrating. Try and remain calm and remember the end goal – you in your new home. It’s easy to lose sight of that at times, so just keep pushing toward that goal and you can get there!

image courtesy of Giulia van Pelt

5 Home Buying Mistakes After Contract

August 17, 2012 by khproperties Leave a Comment

Ahhh, pressing pen to paper (or clicking on a digital signature line)…you’ve just purchased a new home. Now that your offer is a contract and you’re on your way to buying a home, there will be a lot of things you’ll need to take care of and get done. More importantly, there are quite a few things you shouldn’t do.

Each of these mistakes are pulled from real life scenarios that we’ve seen happen. Making any one of these can destroy all the hard work you and your agent have put into getting you to this point. Sometimes, they can be fixed, but more often than not, they will scuttle the deal and have your lender denying you faster than you can say “Oops.” Avoid these five mistakes and keep the road ahead clear of obstacles and you’ll be sliding your key into the lock of your front door before you know it.

5 Ways to Destroy Your Home Loan

Make large purchases – As your lender is looking through your file and checking all the figures, this one is a common mistake. You’re excited, you just bought a house and now you need a flatscreen TV for that man-cave you’ve always dreamed about. So you buy it…no big deal, right? To a lender it is a big deal. Although you’ve been approved and the lender is working behind the scenes to make your loan happen, any large changes in your cash reserves and bank account statements will throw red flags to the underwriter. And just because you’re just days away from closing doesn’t change this – every lender performs a pre-close audit to double check all the figures. Wait until you’ve closed and funded before getting extravagant. Best advice? Wait until you’ve received a month or two of mortgage bills to rebalance your budget before making any large purchases.

Credit, credit everywhere – Now that you’ve seen how strong (hopefully) your credit is, you figure now’s the time to think about adding a new car in the driveway. So you hop on down to the local dealer, find the car of your dreams (and it matches the curtains too!) and sit down with the car dealer to talk financing. First thing they do? Run a credit report. Even if you don’t buy the car, that credit check will show up on the lender’s credit report. You’ve just given the lender a reason to worry. Credit checks can lower your scores and in times of tightened lending standards, any movement in your overall credit score can cause a loan to fall apart. Best advice? Don’t open any new lines of credit – cars, store cards, or credit cards and don’t spend on credit during the closing process. The more you can avoid this, the better your chance of closing on time.

Late payments – It goes without saying that you should pay your bills on time. You always should and if you’ve been approved for a home loan, you’ve probably done well at it so far. Don’t mess up your closing by suddenly changing course and paying a few bills late here or there. Best advice? Simple – pay your bills and pay them on time.

Make too much money – This one might sound a little odd, since more money is better usually, but any large deposits into your bank accounts can trigger more investigation by the lender and hold up closing. Where did the money come from? Why are you receiving it? By the time you’ve signed a contract and have moved through the basic approval process and into underwriting, anything – negative or positive – can affect your loan. Don’t give the underwriter a reason to take a second look at your file and ask more questions. The more questions, the more paperwork, the more time, the more chances things can go wrong. Best advice? Speak with your lender about any money you might be receiving – even gifts from family members prior to the loan application process. They will be able to guide you on what you should and shouldn’t do. Try to freeze-frame your current standing financially (using the above advice as well) and give the underwriter the same picture of you on day one as they see on the closing day – deviating from that too much in any direction can cause you trouble.

Lose/change your job – No one chooses to lose your job, but it does happen. If you lose your job consult with your lender immediately. If you’ve been eyeing a job change, you should also let your lender know. Best advice? Stay put if you can and don’t make any sudden changes (do you see a theme developing here?). No one can avoid losing a job, but it never hurts to stay on the bosses good side while you’re heading toward closing.

By avoiding these five mistakes you can help make your closing smooth and comfortable for you. There is nothing more frustrating for home buyers than dealing with an underwriter who needs red flags cleared up. The minute you go under contract for a home, remember to keep your finances in order…the same order when you applied for the loan.

Thanks to Linda Rudd with Legacy Mutual Mortgage for the inspiration for this post during our office meeting.

image courtesy of haldean

Is Now a Great Time to Buy Real Estate?

May 14, 2012 by khproperties Leave a Comment

You’ve seen the ads before or heard the news: “Now is a great time to buy!” You’ve probably heard it more over the last few years than ever before, even a few weeks after the mortgage meltdown. The news has come from your REALTOR®, your lender, people on TV, your friends and family, and the National Association of REALTORS®. The phrase “now is a great time to buy” is everywhere. But is it?

Here in San Antonio our real estate market has certainly picked up. Houses are selling faster and for more money. I’ve seen several multiple offer situations. All of these are good indicators that the people do indeed think it’s a great time to buy. Interest rates are low, we have a good selection of homes on the market to choose from, and sellers are eager to get their home sold after months of slower activity.

While all those factors make for great headlines and a definite upside to buying a home, when I’m asked this question, I always ask one in return; “Is now a great time to buy…for you? Although you always want to try and time your purchases to save the most, a home is a necessity in life…it’s shelter, one of the three main ingredients for survival. If you need to buy or want to buy a home, you need to look at the factors in your life and make the decision that now is a great time for you to make the move.

The largest of the deciding factors you need to consider is whether or not you have your financial house in order. Is your credit looking good? Do you have enough income? Do you have enough savings? Will you be able to sustain a mortgage payment for the long term? By knowing that your finances are ready, you’ve made the biggest part of the decision. Easiest way to do this? Have your REALTOR® recommend a few good lenders to you and sit and talk with them. They can help you understand what price range you’re capable of buying and help show you anything you might need to fix before applying for a loan.

All the other factors are much smaller in scope, but should help you determine whether it’s a great time to buy for you. Is your family ready? Do you need more space? Do you need less space? Is your job stable? Are the types of homes you desire out there? What are current interest rates and is your credit good enough that you can lock them in, or will you be forced to pay a higher rate than what you see advertised? Ask yourself these questions and know your answers and you’ll be able to determine whether or not now is a great time to buy. The media will almost always tell you it’s a great time, but unless they can see into your mind, they’ll never know that it’s the perfect time for you.

image courtesy of olgaberrios

Buyers

Steps to buying a home.

When you are ready to begin searching for a new home, the process can seem overwhelming. Not only do you have to take a look at the homes themselves, but you have contract negotiations, inspections, financing and more. That’s why it’s important to have a professional REALTOR® on your side to guide you through the process and help look out for your best interests along the way.

A typical transaction roadmap involves the following steps:

Loan Pre-Qualification -> Home Search -> Write an Offer -> Negotiate a Contract -> Property Inspections -> Secure Financing -> Closing

While each transaction can be different, these critical elements form the backbone of most real estate purchases in Texas.

Loan Pre-Qualification

One of the largest pieces to the home buying puzzle is financing. While some people prefer to pay cash for their homes, a large majority take out a mortgage in order to buy property. Getting pre-qualified with a knowledgeable lender can help you to understand:

Price range of homes you can afford
Loan types and their unique requirements
Monthly payments, taxes, and escrows
Closing costs
Credit scores

Once you have a good grasp of your financing options, your lender can provide you with a letter stating your pre-approval status. If you are looking to purchase a home by paying cash, your financial institution can issue a similar letter verifying funds.

Many sellers in today’s market require evidence of financial viability before even reviewing any offers. With that in hand, then you can move on to then comes the step of finding the right home.

Property Search

One of the most helpful things you can do as a consumer is to come up with a list of priorities in your home search. If there’s a neighborhood or school district you have to be in, that can help you to narrow in on the right home much more quickly. If you have special needs (such as wanting to keep sheep) or extreme flexibility in your living space, it’s important to communicate these issues to your agent up front. That way they can work with you to narrow down your criteria and implement a comprehensive search of available homes.

Many people take up the home search themselves through the internet. This can be extremely informative, but also misleading, as many websites contain outdated or inaccurate information. Kimberly Howell Properties agents have access to thousands of the most up-to-date listings in and around San Antonio. This includes Boerne, New Braunfels, Pleasanton, and even Seguin. They are specially trained to help you sort through your criteria, examine neighborhood features, and show you available homes that meet both your wants and your needs. Even if a property is not listed on the local MLS, your agent can make arrangements to show you the property.

Your agent can then schedule times for you to tour your property choices, and help you keep track of your likes and dislikes for each home or area. If your criteria change, your agent can adjust your search accordingly.

Writing an Offer

Once you have found the home of your dreams, your agent will continue to research the market and help you to formulate and negotiate an offer. They can explain the terms of the contract to you, and help you put together an offer that is strong but also meets your specific needs. The offer will address a sales price, but will also cover issues of closing date, home warranty, repairs, title policy, and more, and your agent can explain the who, what, and why’s of each element. The agent will give you advice and information, but at the end of the day, it is your decision as to what price and terms you offer. REALTORs® are required to use specific state regulated contract documents. You are always advised to have an attorney of your choice review any offers or contracts, if you so choose.

Once an offer is submitted, you wait for a response from the seller. Possible responses include:

Acceptance: seller agrees to all terms as they were written, and signs the contract as-is.
Counter-offer: seller does not accept your offer, but replies back either verbally or in writing with their own proposed terms. Then it becomes your turn to accept, reject, or counter the seller’s counter-offer.
Reject: seller does not accept your offer and does not present a counter-proposal. Sometimes sellers will reject an offer and provide a list of changes that might make a future offer more agreeable, but the seller would not be bound by these terms.

It is important to note that contracts are not legally binding in Texas until signed by all parties. Many times offers are negotiated verbally for ease and expediency; however, until all parties (buyer and seller) have signed off on all terms, the contract is not enforceable.

In the case of multiple offers, there are very specific procedures that should be followed by the seller. Ultimately a decision as to which offer is accepted or countered lies in the hands of the seller alone, and even a full price offer may not be selected. A seller working with an agent should be advised to treat all parties fairly and no single offer should be given an unfair advantage over another. Your agent’s experience, education, and professionalism can help you to navigate these tricky waters should you find yourself in this type of offer situation.

Offer Acceptance

When the negotiating ends, and everyone has signed off on the paperwork, you’re officially under contract. Earnest money will be kept in escrow with the title company, a neutral third party.
There will be several critical elements that you and your agent can work together to address and complete as you move the process towards closing.

Inspection: You will want to have the property inspected almost right away. Home inspections can reveal serious problems, code violations, or hazards that may not be visible to the untrained or naked eye. Your agent can help you to find a reputable inspector to review the home’s major systems and provide you with a detailed report. You can then use the report to negotiate repairs with the seller.
Loan Process: Once you have a contract, you will want to begin the formal loan application process with your lender. They must provide you with a Good Faith Estimate (GFI) which outlines the fees and costs related to your mortgage, as well as monthly payments, interest rates and more. Once you have submitted the application and all documentation required by the lender, then the file goes through the mortgage underwriting department for verification, and approval. The underwriting process can be a lengthy one, so quick submission of requested paperwork is essential. Once the file is reviewed in underwriting, the lender may have a list of conditions that must be met in order for the mortgage company to give final approval of the loan.
Title Commitment: The title company will research the ownership history of the property, and any liens that may be recorded against the buyer or seller. The liens on the property must be paid or cleared up before the title of the property can transfer from seller to buyer. The title company will use the information to issue a title insurance policy, which essentially is an insurance policy you, as the buyer and soon-to-be owner, have to guarantee that the seller had the right to transfer ownership to you, and that no other parties or issues should arise that bring this right to ownership into question from prior acts or omissions.
Appraisal: Your lender will order an appraisal of the property. This report is an official assessment of the property’s value, based on the market at the time of the appraisal. Appraisers have very specific requirements that they must meet in their reports to determine value. If the property appraises above the sales price, congratulations- you have equity. If it appraises below the sales price, your agent can advise you about your options- re-negotiating sales price, contesting the appraisal, terminating the contract, paying the difference out-of-pocket.
Insurance: Homeowner’s insurance is a critical piece of the homeownership package. If you have a mortgage on your home, the mortgage company will require that you maintain insurance coverage, or they may even force you to pay for coverage or seek damages or even foreclosure. Finding the right type of coverage at the right price is something your agent and your lender can assist you in doing.

Closing

Once all of the above pieces come together, and the lender sends closing instructions to the title company for your loan, transfer of title, etc. you can arrange a time to close on the home. The title company will provide a breakdown of credits and expenses for both buyer and seller, called a HUD-1. You will generally go to a title company office to sign all closing paperwork and loan documents. You will deposit the balance of your down payment and closing costs to escrow, and your lender will deposit the balance of the purchase price. The deal is not closed until monies have been paid. This is often referred to as “funding.”

Once the property funds, you can pick up the keys and move in to your new home! Your agent can help you make the necessary arrangements for moving, utilities, and more.