Now here is the second part of the blog last week hope you guys could read it and get some insights, especially for new home buyers.
5. Home owner’s insurance- Get the home insurance quote as soon as possible so you know how much exactly you have to pay because before being under contract they were just estimating it. Now if your insurance fees go beyond your pre-approval amount and could cause your loan to be denied. If the seller of that home has had a lot of claims that could increase your home insurance payments. Please check the seller’s disclosure so you can check the claims that they have filed.
6. Appraisal value comes in short- If the appraisal value is lower than the selling price. If the appraisal comes in below your contract price you can still negotiate with the seller to come down on the price or negotiate something but if you can’t negotiate something then that loan could be denied because you haven’t amended the contract price.
PRO TIP– MAKE SURE YOU HAVE AN APPRAISAL CONTINGENCY IF YOU PLAN ON GETTING THAT EARNEST MONEY DEPOSIT BACK.
7. Funds for closing or reserve funds. Does the lender need some kind of funds separate from your down payment, closing costs, or your savings? Please check this with your lender up front. If let’s say your parents give you a $10,000 gift and when the lender sees this they could think that you took a loan and this could affect your debt to income ratio. So please be upfront with your lender before you deposit anything and have proof that it’s not a loan.
8. Fraud resulting from occupancy- Most owner-occupied loans like FHA low down payments, conventional, and VA are typically owner-occupied loans so the lender is expecting you to live in this home you are interested in purchasing because this would mean lower risks to them as you would be living in this house.
I would suggest that you get a lender that goes through the underwriting process with you, so you have a higher chance of your mortgage being approved before going under contract.
If you miss the first part of the blog please check it out here. If you have any questions that I can help please fill out the form below and will get back to you as soon as I can. Thank you.