Pinetop White Mountain Blog

Good Morning Everyone!

This morning I wanted to address the prospective home buyers out there, especially first time homebuyers who would like to have a place to call their own.  It really is a great time to buy a home as long as you are prepared ahead of time.  It comes down to this, if you want to buy a home these days you need to make sure you are truly qualified for that loan.  The lending restrictions are tough and anything you do can affect your ability to get a loan. 

I wanted to address a specific situation for you to show how quickly things can go sideways.  A Buyer finds a home they truly want despite the fact that the house needs a lot of work.  It is exactly what they are looking for and are willing to do what it takes to make the house a home.  They make an offer on the house. The seller accepts the offer and agrees to the terms in the contract.  The Buyer goes to a lender and gets a prequalification on the loan.  They have good credit, show good income, and on all fronts appear to be a good risk for the loan. 

Because this is an FHA backed loan on a manufactured home there are a lot of repairs that will need to be made before FHA will approve the home. After much negotiation the seller agrees to complete the necessary repairs which are quite costly.  

The Buyers are planning on relocating to the area where the house is.  The husband has a good job where he is and their loan preapproval is based on the income at the job he is presently working.  Unfortunately during the loan process the Buyer goes to his present employer and submits a letter of resignation when his current contract is up.  A week before closing the lender sends a verification of employment to the buyer's work and finds out he has submitted his resignation and does not have employment firmed up in the new location.  What do you supposed happened?  Of course, a week before closing the buyer's loan is denied by underwriting. 

It brings home to all of us that it is so important when you are trying to buy a home that you cannot, and I repeat CANNOT, make any major changes in your situation when you are trying to buy a home.  You can't change jobs, you can't make any major purchases, you can't do anything that will jeopardize your pre-approval.  The result is not pleasant for anyone.  The seller is out a lot of money making repairs for a buyer who can no longer qualify for a loan, the Buyer is mad at the lender because their loan has been denied, the agents involved have a lot of time an effort in a transaction that isn't going to close, and everyone walks away terribly disappointed and upset. 

Lending regulations today are really tough.  It is more important than ever to keep that in mind throughout a transaction process because it takes very little these days for underwriting to deny to fund a loan.  They don't care about the hardships it places on all involved in the transaction. They are being watched very carefully by the powers that be and with all the bad loans made a few years ago during the high times, they are being extra cautious these days. 

So...the bottom line is, if you are trying to buy a home.  You must be very very careful to keep things on an even keel during the loan process.  Otherwise you and everyone else is likely to be very disappointed when a few days before closing, the lender says NO!

Keep us in mind for assistance in Buying or Selling a Home.  Remember our motto:  "WE WORK FOR YOU!"

Sandra & Bruce Paulow, REALTORS®