7 Livermore Mortgage Qualifying Tips for 2013!

If you want to buy a Livermore home, you might be concerned about your ability to qualify for a mortgage. And with good reason! The stingy lending environment isn’t likely to change anytime soon, according to a recent article by the Wall Street Journal. Mortgage interest rates may be historically low, but mortgage underwriting is historically tight!

Fortunately, I have a few mortgage qualifying tips in my pocket that could help you get your loan approved. Keep in mind that while a mortgage pre-approval has value, it isn’t a loan guarantee. It doesn’t take much to blow your pre-approval out of the water prior to closing, and this is where some home buyers go wrong.  Here are 7 mortgage qualifying tips to help you!

1. If you have credit skeletons in the closet, disclose them up front at the time of application. Any bankruptcies, foreclosures, short sales, loan modifications, judgments, and so on should be declared by you. These may not show up in the “first pass” of your credit review, but mortgage underwriters will dig much deeper prior to closing.

2. If you claim a bundle of losses on your income tax return, this can work against your mortgage approval. You can’t refuse income to Uncle Sam without having consequences with Aunt Fannie Mae.  If your pre-approval was based on income that your tax returns can’t back up, you might still qualify for a mortgage using the lower income calculation. However, this may put you in a completely different price range of homes.

3. If you are a business owner or employee who receives some income in cash, you need to have a paper trail to support the earnings. Lenders won’t count funds if the sources cannot be proved. Incidents of mortgage fraud and other financial crimes have made mortgage underwriters nervous about cash. Document everything.

4. Avoid opening new lines of credit right before you apply for a mortgage, and especially during the home buying process. Any change to your credit profile can cause your mortgage underwriter to get edgy. Remember, unlike the “good ol’ days”, lenders are looking for reasons not to approve your mortgage.  Getting new credit, changing your credit score, and changing your debt-to-income ratios will open a can of worms.

5. Avoid changing jobs during the home buying process. Even if your new position pays more money, the lender will view it as a higher risk because of the short length of employment.

6. Be cooperative! If a lender asks you for more bank statements, more paycheck stubs, or other documentation, it’s better than getting a flat “no.” Lenders are looking for consistency in your character and financial behavior. Also, if you do not qualify for one type of mortgage they may review you for another. This means getting fresh paperwork and obtaining the most recent data possible.

7. Stay ahead of the game by pulling your own credit history and FICO score once a year. Visit annualcreditreport.com and MyFico.com to review your personal credit profile.

I hope these tips help you! I’ll also be happy to refer you to good mortgage lenders in Livermore who can answer your home financing questions.

Thinking of buying or selling a Livermore home? Let’s talk! I will share the latest market data for your neighborhood and help you find the best opportunities. Just contact me for the latest home sale details in Livermore, Pleasanton or Dublin. I’ll answer all of your questions, and provide you with expert guidance for success!

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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