Income Items:

1.  Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.
2. Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
3. Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.
4. Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
5. You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
6. Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
7. If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).
8.  Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
9. Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
10. Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.

Asset Items:

1. Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
2. You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
3. Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
4. If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).

Credit Items:

1.  Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
2. Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
3. Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.

When buying a home, remember the Boy Scout motto, “Be prepared”. Following these suggestions will make your loan approval easier and less stressful.

Please remember that each mortgage company and application is different so for the most accurate information always talk to your preferred loan officer. To find out more information, contact Jane Schneider at 1862 Mortgage or any 1862 Mortgage Loan Officer for more information at 866.441.1862 or Info@1862Mortgage.com.

1862 Mortgage has partnered with Ruhl&Ruhl REALTORS to offer a convenient one-stop experience for both home buying and home financing needs nationwide. 1862 Mortgage is a DBA (Doing Business As) of Shelter Mortgage, an operating subsidiary of Guaranty Bank. As part of a strong and stable bank, 1862 Mortgage offers the promise of longevity and security along with a commitment to service excellence.

Information provided by: KCM Blog

Let’s start from the beginning,  say you have begun your home search and you meet with a Lender.   That Lender will review your credit along with income and assets to determine if you qualify for a new loan.  What happens when you find out you do not qualify?

First, find out what steps you will need to take to get qualified. These may vary and include a credit improvement plan,  a savings plan to accumulate your down payment and closing costs and/or a plan for how long you must be on your job or earning variable income.

These are steps that you can work on to become a preferred buyer.   They may take a few months or a few years, if you have had a more serious credit event such as a recent foreclosure or bankruptcy. However isn’t it important to get and work on a plan if you truly want to purchase a home?

An important thing to keep in mind is that you will want to find and work with a lender that has the time to assist you in making these steps a reality. You do need to know there is no “Magic Bullet” and that it will take work and discipline on your part.

Mortgage qualification guidelines are still constantly changing and in most cases tightening.  It may not get easier for anyone to qualify for a mortgage loan in the short term.    We at Ruhl&Ruhl Realtors partnered with 1862 Mortgage will always be here to help you achieve that next step.  The pre-approval process is completely free.  Our 1862 Mortgage Loan Officers are trained to help you improve and plan so you can work towards the goal of homeownership.

Please call 563-441-1776 or visit RuhlHomes.com/Mortgages to get pre-approved or to speak with a loan officer today.

some infomration provided from Allen Tate Blog.

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

• Historically low interest rates
• The ability to lock in these rates for thirty years

Interest Rates

Because of the financial crisis, the government stepped in and instituted a series of programs which pushed mortgage interest rates to historic lows. If we look at 30 year mortgage interest rates before and after government intervention we see the impact these programs had (see chart below).

According to Freddie Mac, from 2006 to the start of the financial crisis (the fall of 2008), the average rate was 6.29%. Since then, the average rate has been 4.92%.

A purchaser can still get a 30 year-fixed-rate-mortgage at approximately 5%. However, interest rates this low may soon disappear. The government has questioned its role in supporting homeownership. In the administration’s REFORMING AMERICA’S HOUSING FINANCE MARKET: A REPORT TO CONGRESS, they are very strong in voicing their thoughts on this issue:

…our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters, and carefully designed support for market stability and crisis response…

Under our plan, private markets … will be the primary source of mortgage credit and bear the burden for losses.

What are the probable results of this decision?

The Royal Bank of Scotland:

“The (government) currently provides 95% of housing finance in the U.S.; any reductions of their involvement in supporting mortgages mean interest rates will have to go up to induce private lending.”

AnnaMaria Andriotis, writer for SmartMoney:

“In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”

The day of a 5% rate seem to be coming to an end.

Locking in a rate for thirty years

We must also realize that having the ability to lock-in a rate for 30 years may soon be a thing of the past.

There are a growing number of people who think that our mortgage industry should imitate those of other industrial countries around the world. If we do start limiting government support for the mortgage process, the 30-year-fixed-rate mortgage may disappear. Other countries, like Canada, only allow a purchaser to lock in a rate for a five year term. After that, the borrower must renegotiate a new mortgage at current rates. Could that happen here?

Mark Zandi, Chief Economist of Moody’s Economics.com addressing the administration’s recent report:

“A private system would likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, primarily offering adjustable-rate mortgages. Based on the experience overseas, the fixed-rate share in the U.S. would decline to an average of between 10% and 20% of the mortgage market compared with a historical average of closer to 75%.”

Bottom Line

The COST of a home is dramatically impacted by the mortgage component. Today, we can get a 5% mortgage and lock it in at 5% for the next thirty years!! Both of these opportunities may disappear in the future. You should take this into consideration if you’re looking to purchase a home.

Keep checking RuhlHomes.com for up to date information on the real estate market.

Some information and statistics provided by: KCM Blog

While we specialize in Iowa City mortgages and Quad City mortgages, the coverage area for 1862 Mortgage stretches from coast to coast. Our loan officers have issued home loans across the nation, and are ready to discuss your mortgage options today. Please feel free to email us, or telephone an agent during business hours, and they will reply with a quick, no-hassle phone call. If you are in the Iowa City, Coralville, Dubuque or QC area, feel free to stop by one of our offices or set up a meeting to discuss Quad Cities mortgages and Iowa City mortgages. No matter where you are in eastern Iowa or western Illinois, there is an 1862 Mortgage office conveniently located near you.

1862 Mortgage issues loans in all fifty states, and is backed by the stable, secure and family-owned Bank of Milwaukee. This partnership allows 1862 Mortgage to be a “one-stop-shop” for your national, Iowa city or Quad Cities mortgage needs. Plus, the loan officers at 1862 Mortgage can provide you with all aspects of the home buying process under one roof, including real estate searches, home loan pre-approval, underwriting, financing and closing services. Contact us today for Quad City mortgages, Iowa City mortgages or national mortgages, and see how pleasant and easy, the home buying experience can truly be.

Ruhl&Ruhl REALTORS

Customer Service – 866.441.1776