Posts Tagged ‘underwriting’

Tales of a Home Buyer – part 5

June 7, 2011

Written by Shawn DeVries

My Loan Officer now took my file (all 7,000 pages at this point) and submitted it to the underwriter for them to review and verify.  I was feeling a little more confident at this point that the loan would go through smoothly.  However, the first part of this process is not just for the underwriter to approve the loan, but to also to gather more information (called conditions) if needed to support their decision.  It’s kind of like the kid on the playground who says, “Oh yeah? Prove it!” when you say you can do a handstand or something else you can no longer do at age 39.  (There’s a whole other story there.  Don’t ask.)

I am happy to report; my loan was approved by the underwriter with minimal conditions.  Those were submitted and my Loan Officer and Title Agent were soon given the all clear sign to get the final documents ready for the closing.  If you think the papers you signed for your application were excessive, you haven’t seen anything yet.  Some of the documents are the same ones you signed for the application.  You get the privilege of signing those again.  Others are new forms that detail your loan and how you will repay it.  Then there are others that give you important information about the whole transaction, and then even more that verify you were given that information.  As you may have guessed, there were a couple politicians and lawyers involved in determining the process for buying (or even refinancing) a home.  I highly suggest a big breakfast before and a hand massage after the closing.

The day of my closing seemed to never come.  The dream of owning my own home was finally here after almost 3 years of planning and hard work.  The moment the keys to the front door were placed into my hand was, as they say, priceless.  Owning a home is not just the purchase of piece of property.  A home is where you raise a family, share memories, retreat from the world.  It is an investment unlike any other.  Stocks and bonds can never hold the emotional ties that a house does.  A home is not just brick and mortar; it is a part of who you are.

We, at Awareness Home Funding, have always said we had one of the best careers there is.  It is a high honor to help someone with the most significant transaction in their lives.  We’ve been through the process – not just as loan officers and processors, but as home owners ourselves.  We haven’t forgotten the feelings and emotions attached to the address.  I’ve shared my story, and you have (or will have) your own.  The point in sharing mine is that we understand, completely, and are here to help you with compassion and expertise.  We’d love to be a part of your unique story and happy ever ending.

Tales of a Home Buyer – part 4

May 26, 2011

Written by Shawn DeVries

After getting the purchase agreement signed I again pulled the needed documents for my Loan Officer.  (Yes, all 4,000 pages because 3 months had passed and updated information was needed.  We really do understand what buyers are feeling.) My information was entered into that program again that analyzes the data and based on preset criteria makes a decision on whether or not to approve my loan.  This “little” program can really freak you out sometimes, and all for no apparent reason.  

Ironically the same feelings can occur when you are refinancing your home.  These transactions are big deals and are a significant portion of your personal financial status.  It is no surprise that a borrower will feel some angst that is in direct proportion to their emotional investment to the home.  Highly emotional people will be highly invested into the process.  (I would like to say at this point that in case you have not guessed, I am a passionate person.  My mom will probably describe me in other words, but let’s not get her anymore involved than she already is, okay?)  Fortunately, these results came back just fine too on my loan.   

The next part was to develop my case in order for my Loan Officer to submit my file to an underwriter.  At this point in the home buying process your lender has gotten to know you fairly well.  They understand your financial situation and know what your goals and dreams are.  At least your lender should want this home for you as badly as you do.  If not, find out why.  The underwriter however does not know you.  All they have in front of them are numbers to compare and analyze.  The documents you submit need to tell your story for you.  Share what you need to support their decision so they see you as a low credit risk. 

Shortly after my offer was accepted and the paperwork fun began, I had a full inspection of the home done.  I was relieved to know there were no major issues to resolve or problems to fix.  For a home that was over 45 years old it was in amazing condition.  Getting an inspection is a crucial step in buying a home.  You want an expert without emotional ties to give you an unbiased opinion of what you are buying.  Follow them on the inspection.  Look at what they are looking at, poke where they poke and ask lots of questions.  A good inspector will tell you what needs attention and what is good with the house.  They should be able to also tell you how serious an issue is.  Telling you your furnace is getting old isn’t very helpful.  Letting you know the average life expectancy of a furnace and verifying the age of your unit is helpful.  Letting you know where your unit is beginning to show signs of wear is also beneficial.  Take good notes while on the inspection, but also get their findings and recommendations in writing.

Title work is another major piece in the process.  The title agent confirms that there are no liens against the property that would prevent the house from being sold.  It also confirms who the rightful owner(s) currently is (are), that property taxes are current, and prepares the paperwork so that there is a smooth transfer of ownership (among many other steps).  Title agents are also a great partner to have when buying a home from a trust (like I did), out of a foreclosure or short sale or any other transaction that may involve a bit more documentation.

The third significant step that happens at this point is having your home appraised.  Your lender wants to know the true market value of the home you are buying.  This doesn’t mean they are checking on how well you negotiated and if you got a good deal.  They are looking to protect their investment in you.  This house will be the collateral on the loan.  A lender does not want to lend more than what the property is worth.

After a slow start in finding my dream home, the loan process went very smoothly.  Supporting financial documents?  Check.  Good inspection?  Check.  Appropriately appraised home?  Check.  Title clear and without liens?  Check and check again.