The Moving Target

As the mortgage industry continues to evolve the toughest obstacle to over come is the constant moving target of loan approval. Tougher guidelines continue to limit home ownership to those who want to buy. Many potential home owners are finding out they may have qualified last month to purchase a home and now they don't OR they are approved for a much lower loan amount. So what can you do to make sure that you are able to buy home today AND next month with guidelines changing so rapidly and often?


You need to make a budget for yourself and know what you can afford and WANT to pay on a monthly basis. The biggest problem most potential home owners make is they try to purchase a house at their qualifying amount, which is not always what they can afford. Mortgage underwriters only account for the debt that is reporting on your credit and you may have other obligations that are unknown to the underwriter. Make sure you have room in your budget for emergencies and don't over buy. By not over buying you are also protecting yourself from debt to income ratio guidelines changing.

Pay off your debt and save money! I know this sounds like common sense, but you don't how many people purchase new items for their home BEFORE they close or start the approval process. The lower your debt and the higher your savings will help your chances of loan approval when guidelines change. Mortgage underwriters will grant exceptions on certain guidelines if there are compensating factors and the two biggest compensating factors; our your debt to income ratio and savings.

Plan ahead - Once you obtain a mortgage approval it is typically good for 120 days, but you must be approved FIRST. Before you start looking for houses talk with a mortgage professional and obtain underwriting approval. This way if guidelines change, you most likely won't be affected as your loan is already approved. Also, the approval process is taking a little longer then it did six months ago, if you wait to start the approval process until you are under contract you may run in to complications with closing on time.

Finally, be prepared for the loan approval process to be a little more in depth and require more documentation then you did the last time you purchased a house or refinanced. If you haven't obtained a new mortgage in the last 12 months you are going to be surprised/shocked on how different the process is now.

If you have any questions or would like to be pre-approved for a mortgage please call 303.666.6550, email, or visit us online.

http://www.colomortgages.com/