Claudia Kim

Your family is growing; you want your kids in a better school district; or perhaps you are upwardly mobile.  Whatever the reason, you are interested in purchasing a new home.  The good news is that this is the BEST real estate market for you.  Here's why:

Consider your home is worth $400,000 based on recent sales, but with a high inventory of homes for sale and a sluggish market, you need to accept $384,000 (4% lower) to get the property sold.  Your immediate reaction would be that you lost $16,000 and you say to yourself, "I should have sold six months ago." But you really didn't lose.  In fact, you gained because you are moving up.  For example, if you are buying a $600,000 home, that seller is faced with the same sluggish market you faced when you sold your home.  You are now able to buy the $600,000 home for $576,000 (4% lower).  Although you sold for $16,000 less, you bought for $24,000 less so you benefited by $8,000.  In an opposite market where houses sell fast and for more than the asking price, you can lose money when moving up.  Also, and more importantly, this is the best market to find the "perfect house" because you have time to shop and the inventory of homes for sale is larger.  In a sellers market, you may end up "settling" for a home because the choices are slim and you are pressured to buy quickly before values rise even higher.  Another great benefit for you in this market is that some sellers will accept contingent offers which are non-existent in a sellers market.

Everyone wants to buy low and sell high, but it's virtually impossible to time markets.  This is called speculation.  If you view real estate as a long-term investment, 5 to 10 years minimum, you will likely catch a "wave" of appreciation.  Remember, you will never catch the wave unless you are in the water.

One thing that is important for you to be aware of is that the mortgage underwriting process has changed dramatically as a result of the mortgage meltdown.  Guidelines and regulations for your qualification are completely different that even 1 year ago.  Be prepared to be asked for more documentation that you ever needed before.

The FIRST-STEP toward buying your new home is to be PRE-APPROVED so that any "uncertainty" is removed from your mind.  One of the key questions you must decide is whether you are going to keep your present residence and rent it out or sell it.  Depending on your answer to that question, your qualification may be affected.  We can help advise you on this issue.

It only takes a couple of minutes to ensure that you are saving yourself hours of headaches and anxiety.

Get Pre-Approved Today! It's FREE!

BEST CHANCE OF GETTING THE OFFER ACCEPTED:

* With so many sellers being large banks due to short sales and foreclosures, offers are only accepted from buyers who have a legitimate pre-approval (an automated underwriting acceptance).

* These demanding sellers put very short timeframes for closing and for removal of financing contingencies on the contracts.  If a buyer hasn't been fully pre-approved, these deadlines may not be able to be met.

BE SURE YOU CAN QUALIFY BEFORE SELLING YOUR HOME:

* Underwriting has dramatically changed since you bought your home.  You do not want to put your home on the

market until you are 100% sure you qualify to buy another home.  Only by getting pre-approved can you be sure

you won't get left out in the cold.

CREDIT:

*A responsible loan officer will assist a buyer in attaining the highest credit score possible in order to save the buyer as much money as possible.  Low credit scores can be very costly today.

*A buyer with credit issues needs to work on the problem now, not after they have an accepted offer.

Qualifying Ratios:

*A buyer needs to know what price home they qualify for BEFORE wasting their time looking.

Income:

*Investors are highly sensitive when it comes to declining income, or an interrupted earnings pattern.  The loan officer will provide guidance if a buyer has these issues.

Job Tenure/Stability:

*This is another area of high investor concern and needs to be examined carefully.

Down Payment:

*A buyer needs to know exactly how much money they will need to purchase the home they actually are qualified to buy.

*The paper trail of money and assets is critical to qualifying today, and the loan officer will make sure you have or can obtain the proper documentation.

*ELIMINATE STRESS - Ever since the financial debacle, obtaining a mortgage loan has become a lot more stressful, especially if the buyer tries to do it after they've signed a contract to buy a home.  Getting pre-approved beforehand eliminates that stress because all conceivable problems associated with a loan will have been taken care of ahead of time.

GET PRE-APPROVED - IT'S FREE!

What To Bring To Your Loan Application for a Pre-Approval or an actual Purchase

Use the following checklist to be sure that you bring everything you need to make sure that your loan application transpires as an easy, hassle-free experience. Remember that in the current loan environment overkill of documentation is what we are dealing with. It is critical that your loan officer know everything right up front.

CREDIT -

• Do not dispute any item on your credit report
• No new inquiries on your credit report
• No new debts (furniture, car, truck etc.)
• No late payments on any accounts
• Do not pay off collections or charge off accounts
• Do not consolidate your debt into one or two credit cards or close credit cards
• No increases in balances on credit cards or lines of credit, which would increase your minimum monthly payment
• Remember that a new credit report will be ordered prior to closing.  If your score has dropped, your loan may be declined

INCOME -

• Do not change jobs, become self-employed or quit your job without notifying your loan officer
• Notify your loan officer immediately if your income goes up or down

ASSETS -

• Every dime of the money you are going to be using for the down payment and closing costs must be accounted for
• Do not make any out of the ordinary deposits (especially cash) because all deposits other than payroll must be documented and accounted for
• Do not make any large cash purchases which result in lowered verified bank balances
• Do not change banks or bank accounts
• Follow every instruction your loan officer gives you to the exact degree if you are using a gift.  Failure to do so may result in your loan not closing.
• You must get a homeowner's insurance quote from an agent of your choosing immediately after application because a higher premium than on the good faith estimate may affect your qualifying

The tips above are the best advice we can give you so that your loan will close, will close on time and without unnecessary difficulties.