Home Buying in Phoenix>Question Details

Trulia Phoen…, Home Buyer in Phoenix, AZ

What should be on one's financial checklist before buying a home?

Asked by Trulia Phoenix, Phoenix, AZ Fri Oct 26, 2012

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You will certainly want to talk with a lender so that they can put together a list of what is needed to start the preapproval process.
0 votes Thank Flag Link Mon Oct 29, 2012
Get the zoning checked.

Homes with lots that meet the standard regulation size should be less expensive to own than those that don't all things being equal. The reason?

Homes with lots that don't conform are called 'nonconforming' and require additional review when pulling building permits, other than very basic repair and maintenance.

If you live in Austin, our site can help you get information at your fingertips. For those who don't, follow these simple step:
1. Call the local planning department and ask them to look up the property's zoning;
2. Ask them to tell you what that zoning's standard lot size requirements are; and
3. Repeat 1 and 2 if you have comps that you want to check (this may come in handy when reviewing the appraisal).

Hope this helps!
Web Reference: http://www.zonability.com/
0 votes Thank Flag Link Mon Oct 29, 2012
People, this is being asked by "Trulia Phoenix". I don't think they are going to call you for a referral or for your services... :)

Trulia--Richard does a pretty good job of covering the basics. I like the "one account" idea--makes it easier on all involved. Just move funds early enough in the process that the transfers do not show on the most recent two statements the borrower will need to provide to the lender. Otherwise, it will actually complicate things, as each transfer will then need to be explained.

Credit cards, revolving credit--there are various tiers of indebtedness which impact credit scores. 30% or less is best; under 50% is next; under 70% next.

Richard's comments on credit scores are true, though it is not the "spouse with the lesser credit", it is the "spouse/borrower with the lower middle credit score".

And, his comments about "When you shop for a loan, shop the rate AND the points, or better yet, the lender credit" and "asking every loan originator who runs your credit" highlight one of the biggest falacies about mortgage lending: That it is the rate and fees people should be most worried about. No, it is incompetence on the part of an inexperieced loan originator.

People can do themselves the biggest favor --They should be using their upfront time talking to people they trust about whom they would recommend do their loan, then stick with that loan originator. This is a very complicated business these days; find a true professional and don't worry about shopping for anything else. Why people do the largest financial transaction of their personal lives with someone on-line, or look for the "K-Mart of lenders", is beyond me. Will that extra $500 really matter when the borrower is two months into the process and suddenly "K-Mart" is telling them they don't qualify because "K-Mart" did not have the experience to know to ask the right questions up-front??? Or, "K-Mart" quoted them the wrong rate, because they were not familiar with all the nuances of determining the correct rate (it is NOT a world of "What is your rate?" Contrary to what you hear on the radio or read on-line, there is no one answer to that question, believe me!!). Or, K-Mart put them into the wrong loan product, not taking the time to learn ALL of the borrowers' particular circumstances. ETC., ETC.

I don't think it is a rule that closing "any" account will lower ones credit scores. If the borrower has a number of recently opened accounts, and some with a long history, it might be of benefit to close the newer ones.

I have never had a borrower have to explain a 22-month old late, unless they were on the cusp of approval. Usually there is enough strength there to overcome the "non-bumps".

Definitely agree with the idea the borrower needs to speak to their loan officer before doing anything material with funds. I have had clients miss a $10 credit card payment and their score dropped 50 points (due to most recent events having most impact, even if minor), disqualifying them from getting the loan we were working on. Yes, all large deposits will have to be explained, so, again, they should get the $1,000 from their relative into their account at least 60 days before entering the financing process.

Don't change jobs in the middle of the process. Don't go from a salaried position to self-employed or commissioned within two years of wanting to buy or refinance, as these positions require we wait that long before lenders feel comfortable the borrower will continue to make enough money to qualify.

As Richard says, there are 990-some other items to consider. But, Trulia, please don't call me to discuss them, as I am quite busy. True borrowers wanting a professional loan originator--well, that is a different story. I will be glad to walk you through the process, if you want to work with "Nordstroms" and not "K-Mart". :)

Bill Parker, Loan Officer
AZ Lic# 09011570
NMLS #223607
CPA--Licensed, no longer practicing

GenCor Mortgage, Inc.
15730 N. 83rd Way, Suite 103
Scottsdale, AZ 85260
(O) 480-525-8496; (M) 602-565-3646; (F) TBD
EM: Bill.Parker@GenCorMortgage.com
Website: http://www.GenCorMortgage.com
LinkedIn: http://www.linkedin.com/in/billparkercpa

MISSION STATEMENT: To create an unbelievably enjoyable experience for my clients, while guiding them through the most important financial transactions of their personal lives. My clients know me as their Mortgage Lender for Life. I truly appreciate your referrals.

If you think it's expensive to hire a professional to do the job, wait until you hire an amateur.
Red Adair, Oil well firefighter
0 votes Thank Flag Link Sat Oct 27, 2012
Have a strong credit score. The stronger your credit score the better your rate. Safe enough money for your downpayment and closing costs. Build a healthy savings account. Get preapproved for a mortgage. Find a good real Estate Agent, if you don't have one yet, call or e-mail me--602-769-0890, gracea@realtyoneaz.com or check out my profile on Trulia. I will assist you every step of the way until you find a house you like and will enjoy.
0 votes Thank Flag Link Fri Oct 26, 2012
OMG there are only a thousand things to keep in mind in the months before buying a home. Think steady. If you have multiple bank accounts, chose one to be your primary during the home buying process. Your lender will request documentation for all kinds of banking transactions, and it's easier, more streamlined for you AND the lender if the docs come from one source/bank.

Don't close any credit accounts. Closing accounts lowers your credit score. You should have a good mix of credit accounts, secured and unsecured. Only credit card accounts and lines of credit will be judged on their balances. Ideally, credit card balances should be at or around 35% of their limit, used but not maxed out.

Be prepared to explain all the little bumps in the road, and even the non-bumps. Why was that payment from 22 month's ago late? What do you plan to do with the house you currently own?

Ask (in an email) your loan officer for "permission" before you do anything out of the ordinary, financially. Before uncle Sam gives you $1,000 for your "birthday", let the loan officer know and chime in before you receive the funds.

Know your credit scores at the beginning of the process by asking every loan originator who runs your credit to tell you what they are. DON'T purchase your credit scores. It's a waste of money since the scores you purchase are on a different scale than the tri-merge received by the loan originator. They are happy to give the scores verbally upon request. BTW the score used for loan qualification will be the middle score, and if you are qualifying with a spouse, it will be the middle score of the spouse with the lesser credit.

Do all your loan shopping in a reasonably short amount of time, say within 30 days. Your credit score drops slightly every time your credit is pulled, but there's a general uderstanding that people shop for mortgages, so multiple pulls for a mortgage in a short timeframe will have minimal effect. Note: that doesn't mean you can have your credit pulled for a mortgage, and a car, and a credit card, etc. while your trying to buy a home.

When you shop for a loan, shop the rate AND the points, or better yet, the lender credit. A lender credit is the opposite of points. Point are where you pay cash to buy down the interest rate (below the lender's par rate), and a lender credit is "cash" given to you for accepting an interest rate higher than the lender's par rate. One is not better than the other, it's all relative...relative to the cost-benefit analysis you perform on an excel spreadsheet. Contact me and let me explain. OMG and I'll tell you about the other 997 financial things you need to keep in mind while buying a house.
0 votes Thank Flag Link Fri Oct 26, 2012
This Is a great question for a lender. I usually recommend paying off all debt, saving 5% of the purchase price and getting a few secured lines of credit; bringing up your credit score. Many new builds will help you repair you credit. Lenders will have even better individualized advice for you.
0 votes Thank Flag Link Fri Oct 26, 2012
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