“Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.”
–Preamble to the Code of Ethics and Standards of Practice of the National Association of Realtors-
HOW TO GET A MORTGAGE
Mortgage companies work on “commission”. If they don’t make loans then they don’t make money. So there is an incentive for them to find a way to get you the money you need. The commission is paid in loan fees – usually paid by the borrower – but sometimes paid by the seller. If it is paid by the borrower it is usually rolled into the loan (meaning that you borrow a few thousand more and pay it back over time). These fees are paid when the loan “closes” meaning when the seller gives the buyer the house and the buyer signs the loan paperwork and gives the seller the money.
Sometimes – depending on the mortgage – you might be asked to pay up front for an appraisal (about $500). An appraisal is when a professional goes to look at the house you have chosen and says “Yep, it’s worth the money (or more).” or “Nope, – the house isn’t worth that amount, it is only worth this amount.” If the house is worth less, then the buyer and seller renegotiate or the deal falls apart.
So, the first step is to make an appointment to “pre-qualify”. When you make the appointment, ask the lender what they will want you to bring with you. Usually it is pay stubs or other proof of income. They will look at your income, your debt, and your credit. They will tell you if they can help you get a loan; and they will tell you how much money you can borrow, how much cash you might need (sometimes only $1,000 or less depending on the loan type), etc.
If they can’t help you, they will explain what the problem is and give you ideas on how to fix it.
In either case, knowledge is power. Now you know where you stand and (with any luck) you can begin your search.
This is where I come into the picture. You give me the “budget” and the “dream list” and I start looking for places that match what you want. When we come up with some good matches then I get you inside and when you find one you like I write a contract (offer) with the seller and walk you through the process until you get the keys.
Items your lender may need:
- Most recent pay stubs for all borrowers for the last 30 days
- W-2/1099 forms for all employment income for all borrowers for the previous 2 years
- Personal tax returns for the last 2 years with ALL schedules
- Copy of the most recent checking/savings/retirement statements covering the last 2 months, ALL pages
- Purchase agreement and copy of earnest money check
- Contact information for Homeowners Insurance
- Copy of photo ID and Social Security cards for all borrowers
- Written explanation of credit anomalies, including late payments, credit inquiries, charge-offs, collections, judgements and/or liens
DON’T WATER YOUR FOUNDATION – YOUR HOUSE WON’T GROW
Water is the number one reason (by far) that foundations end up failing. I looked at this old beauty when the owner wanted my “flip” expertise on how to rehab. The house has great bones and he had some great ideas – but the first thing he has to do is get rid of the 2 inch slope in the living room. That’s expensive and spending that money doesn’t add value to the home. People expect their house to be reasonably level.
Many of these old houses had shallow eves and no gutters. Rain water from the roof got dumped on the soil right next to the house and that causes expansion and settling. Even newer homes frequently lack gutters and downspouts – and often downspouts look like the one in the photo – zero use if it just dumps the water next to the house.
What you want to do (or look for) is to make sure any sidewalks, porches or dirt slope away from the house. No planting beds built against the foundation. No sprinkler heads watering the foundation. Put extensions on the downspouts.
Even in dry Colorado water is not your friend!