Thursday, February 12, 2009



Keep checking back

Check Your Credit.

There is nothing more disappointing than wanting to buy a new home only to find you have credit issues to clear up before you can buy that new home. In a way that statement is wrong. Selling your home, finding a new home and then being declined because of credit issues is far worse. In this situation, you could end up renting or at the least have a lot of sleepless nights...

Get a free copy of all three credit reports and check for issues. Issues such as collections, judgments and low scores are factors that could keep you from buying a home, pay a higher rate and/or requiring a higher down payment. You do not need a credit repair company, you can dispute and clear them up. Dispute them and follow up! These are issues you want out of
the way up front. Follow them and don't be disappointed.

the value of your home

Go to and input your address to see what homes are selling for in your area. If you are not familiar with the homes on Zillow, ride by them and make notes of
similarities and differences. Make notes of differences that increase or decrease the value of your home. While you are out, record addresses, similarities/differences and agent name and phone number of any homes you see that are listed.
Do the same for any for sale by owner homes (FSBO) you see. Call the agents and
FSBO's and inquire into sales price and details of the home. Make note of number of bedrooms, baths, garage size, lot size and anything
else that might come to mind.

At this point you need to compare all those properties to your home. Will you have enough equity to pay agent fees, possibly closing cost for buyer and make an adequate down payment on your new home?

If you talk to agents in this process get a feel for how you interact with them. Is this someone you want to list your home with or use to buy a home???????

Were there any FSBO homes that you might have interest
in. Search
and other for sale by owner sites for homes in your area and compare to your

3. What's the Best
Loan Type For You

By type I mean Conventional, FHA, VA or USDA.

Conventional loans refer to all loans that do
not have a government guarantee or insured by the government. It does include
sub-prime, but the most common conventional loan is one that is underwritten
using Fannie Mae or Freddie Mac underwriting guidelines. In most cases a
conventional loan requiries a larger down payment. You can find conventional
mortgage loan guidelines here.

FHA loans has a little less stringent credit
guidelines and as little as 3.5% down. The down payment can come from an
immediate relative or a long time acquaintance. Mortgage insurance is required
on all 30 year loans regardless of loan to value. Some people have referred to
FHA as the new sub-prime. Click here
for FHA mortgage underwriting guidelines.

VA loans are for Veterans as well as active
duty military personnell. VA does not require a down payment. Veterans Home
Loans do not have mortgage insurance but does have a funding fee. You can find
VA loan underwriting guidelines here.

USDA loans does not require a down payment and
the loan can be for 100% of the value. There are income limitations and the
property should be rural in nature. Like Veterans loans there is no mortgage
insurance and there is a funding fee. Click here
for Rural Housing Guidelines.

4. Find a
Good lender/broker


why broker

At this point you have a general idea of your
credit standing, what your home will sell for and how much you will have for a
down payment. Now it is time to find someone you are comfortable with to handle
the loan for your potential new home.

Talk to your friends, relatives, co-workers and associates to see if they can suggest a mortgage lender or broker. At the same time do some research on your own by checking with your bank,
credit union, local paper and the yellow pages for a potential lender. Talk to them. Make sure you comfortable with them and always check the local Better Business Bureau.

The next step is to get pre-qualified. You need to know how
much you qualify for, how much you need to pay down and if this what you want to
do. To a home seller, being pre-qualified means they won't have to wonder if
they are wasting their time because you will not qualify for a mortgage to
finance the amount you are offering for the home.


you are pre-qualified:

not take on new debt or make any expensive purchase

There are so many big purchases that people want to make in connection with a
move: appliances, window treatments, furniture, etc. Additional debt could
change your debt ratio. A change in debt ratio may cause the loan to be declined
and is likely to delay your mortgage closing at the very least.
addition, do not make any expensive purchase that reduces the funds to close
your home loan.

not switch banks are move money around.
Mortgage lenders have to paper
trail all your funds and will most likely ask for several months of 
statements on your checking accounts, savings accounts, money market accounts
and any other liquid assets. Moving money around will require more paper work
and time to get your mortgage approved.

not change jobs.
Do not to make a job change during the time
between your mortgage application and the closing on the home you are
purchasing. One of the factors mortgage
companies consider is length of present employment; they are partial to
stability at residence and employment. A change in employment could cause the
loan to e declined or at the very least, changing jobs initiates the need for
more paperwork, and may delay your closing.  

Do not pack
important documents.
Mortgage loans require a lot of supporting
paperwork. Do not pack your bank statements, tax returns, pay stubs or other
important paperwork.  Do not pack
your checkbook!  Mortgage
closing can be delayed if additional funds are needed at closing. 

Do not buy or lease
a new car.
This should go under the general heading of "no new
debt."  It is highlighted here
because, for some strange reason, many buyers do run right out and lease a new
car during the time between mortgage application and closing! 
As with any debt, this will change your "debt-to-income ratios"
and may cause you not to qualify for your mortgage. 

not ignore your lenders request for documents.
  Being pre-qualified
does not mean your home loan is approved and your work with the lender is far
from over. Your mortgage lender will need copies of your bank statements, W2s,
pay stubs and any liquid assets statements used to get your loan pre-qualified.
You should provide requested documentation as soon as possible to avoid any
delay in getting your mortgage approved.

short, do nothing that negatively impacts your ability to qualify for your
mortgage loan, or initiates a new round of paperwork.  If you have any doubts about doing something that may affect
your ability to qualify for your mortgage loan, please consult your loan
originator before you do it. 

suggestions are merely that—suggestions. 
No one is saying, flat out, that bad things will necessarily follow if
you do any of the above.  They are
offered as cautions.  Many buyers
seem to view the mortgage application procedure as a static action, a snap shot
of their financial lives at a given moment in time.  It’s not. It’s an on-going process that takes into
account everything you do right up until the day of closing. 

4. Family

Have a family meeting. Discuss your options. Do you have a good chance of getting where you want to go? If you have children, will they lose friends, can they make new friends and how about new schools?

5. Spruce Up
Your Home

Location, location and location! You hear that a lot in the real estate business. Hello! Your home
is where it is so your job is to make it appealing enough to get a potential buyer inside. Curb appeal is what you need. Make your home attractive from the street. Clean up the yard, put some flowers out, wash the windows, mow the lawn and be ready to show it at anytime.

Since you are in the initial stages of selling your home. Put a for sale by owner sign in the yard. Post it on and other FSBO sites. You could sell without the use or cost of an agent... Money saved is money earned!

6. Search
For An Area First

Absolutely do not look for a house to fall in love with, LOOK FOR AN AREA TO LIVE IN and then find a house to fall in love with!
You might want to check with
for an area. There are a number of things to consider in finding an area.

First and foremost you must check into crime in the area. Your number one priority is safety for you and your family.
By all means use internet resources such as

Secondly, is there high industrial pollution. Your family's health is a high priority.

Thirdly, is there high amount of traffic in the area? Safety again.

Fourth, are the schools more than satisfactory. This applies even if you do not have children in school. You or your heirs may want to sell some day. Think about resale value.

Fifth, is it convenient to shopping areas?

7. Search
For Home In That Area On Your Own.

Go back to and search for homes in the area you want to move to. Make notes of addresses and ride by some of the properties. Look for sale by owners and homes that are listed. Call the agents and the FSBO properties. Ask about number of
bedrooms, baths, garages. seller concessions and asking price.

Do this to see what’s available and price range only. Get
a feel for the area.

8. Look For
An Agent

9.List your

10. Find a

Negotiate contract.

Seller concessions…Subject to home inspection, loan
approval, rate

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