Are You Really Prepared to Buy a Home in Southern California?

Southern California Mortgage and Finance

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The summer real estate season is almost here and I feel it's a good time to go over the do's and don'ts of the loan process. Let's jump right in:

The DO's:

• Keep your records in good order! If a lender requests to see documentation of any kind, you need to be able to share it with them.
• Be aware that underwriters typically verify your income and tax documents through your employers CPA and/or IRA tax transcripts. Hold on to your new pay stubs as received.
• Continue saving income account statements, keeping all the numbered pages of each statement.
• Document gifts: If you're receiving gift money from relatives, they will need to sign a gift letter, which we'll provide, and an account statement evidencing the source.
• Continue payments on current residence: If renting, continue to pay your rent on time and save your proof of payment; you may also need to show sufficient equity, a lease, and a receipt of first month's rent and security deposit. If you're selling your current residence, be prepared to show your HUD-1 Settlement Statement.
• Keep your credit shining. Continue making payments on time - your score may be pulled again, and any negative change to your score could cause you to lose your approval and your home.
• Things have changed: Underwriters require more documentation now than ever before. Even if requests seem silly, intrusive, and unnecessary, please remember they wouldn't ask for it if they didn't need it!

The DON'Ts:

• Apply for new credit: Changes in credit can cause delays, it can change the terms of financing, and even prevent closing. If you must open a new account, or want to borrow against retirement funds, we ask that you consult with us first.
• Change jobs during the process: Probationary periods, career or status changes, such as from a salaried to a commission permission, leave of absence or a new bonus structure, can be subject to very strict rules.
• Make any undocumented deposits: Primarily large deposits must be sourced, unless they are identified. Make copies of checks and deposits slips, keep deposits small, and avoid depositing cash.
• Wait to liquidate funds from stock or retirement accounts: If you need to sell investments, do it now and document the transaction. Don't take the risk that the market could move against you, leaving you short of funds to close.
• Be afraid to ask questions: If you're uncertain about what you need or what you should do, my team and I are here to help you through the process. Purchasing a home is much easier to do when you have financing in place before you make an offer.

We're here to help you get started, and it's never too early to do that. Give the Alex Caragiannides Team a call when you're ready!