Tuesday, September 7, 2010

The Pendulum

These days it is not so easy to get a purchase loan. A few years back it seemed that having a heartbeat was the requirement for obtaining a loan. They then found out that was not a good idea.
In my years in Real Estate, I have seen the loan Pendulum swing back and forth. At one point you needed to prove you can pay your loan with all cash within a week of closing before the underwriters would give you a loan. Then they started loosening up, only to swing back again to wanting your firstborn to prove they could work for the bank 100 hours a week during the duration of the loan before pre-qualifying you.
Then, around the beginning of this decade, they decided everyone should be able to get a loan, even if you were a student and you did not have a regular paycheck, you could get a trillion dollar loan!
It is now 2010. not only do you need to prove you are an actual person, the banks now demand proof for everything you do. It is possible to get a loan, but now, you have to prove you CAN pay the loan off in the time allotted by the terms. So, when applying for a home loan, be sure to bring all your records. Call ahead to see what they will request from you. If you are obtaining gift money, be sure to have the giftor sign a letter that they are, in fact, gifting you the money. The lender may also ask for a copy of the giftor's bank statement to be sure they have the resources.
Obtaining a loan does take a little longer than before, but if you do your homework, and work with a great, communicative lender, it can go a lot smoother then the horror stories you hear out there.
As always, if you are considering Buying a home, call me. I can assist in finding the home, and the lender that will work for you.