Here are 5 scenarios that could keep you from qualifying for a home.

Today the mortgage rates are at historic lows and the homes are more affordable than they have been in our lifetime and probably for the next 50 years as well.  With that being said it is a time of great caution from lenders and burdensome government regulations which has created obtaining and qualifying for a home loan a frustrating and stressful part of the home buying process.  Here are 5 things not do while trying to qualifying for a home loan.

What if I change jobs before the loan closes?

Yes, this will have a huge affect to you obtaining a home loan.  The underwriter has approved your application based on the last 2 years of your verified employment.  A few days before closing the underwriter will repull your credit and check to verify your employment.  If it has changed the  home loan will be denied.  At closing you must sign a document stating that all information on your application has not changed.  If it has changed and you lie it’s big trouble.

Now if you have received a promotion or a raise within the same company then that’s alright and this would be helpful in the underwriters approval.

Will rental income I receive from a rental property be counted as additional income?

No, unless it has been documented on the borrowers tax return for the last 2 years.

Can I qualify on my income and use just my wife’s credit?

No, good credit without the income is of no use to the underwriters approval.  Lenders require both good credit and the financial means to repay from the borrower.

I have a student loan.  How does that affect qualifying for a home loan?

Yes, you must be current on your payments or if you haven’t started the repayment process then you must start the repayment within the first year of the mortgage.  This payment will be counted against your debt ratio the underwriter will use this to calculate your repayment ability.

If I’m divorced, does the existing mortgage on our home affect me from getting a home loan? 

Yes, if your income is large enough to qualify for both home loans.  Both loans will be considered in your debt ration calculations.  Some underwriters will look at the credit worthiness of the spouse in the divorced home and if underwriter deems little risk of non payment then they may give you approval on a new home loan.

I hope this has been helpful.  My best advise is to start early in the loan process even before looking at homes.  Getting a home loan is the most difficult part of the home buying process nd most people get the cart before the horse.  It’s heart breaking to look at homes and find the one you really want and then apply for the home loan only to find out you don’t qualify.  If you had started 3 months earlier the bumps on your credit could have been cleared by now.  I see this alot.  Don’t be that guy!

Happy Trails,

Donnie