Stay away from making any other large purchase of any kind — especially a new car. Even if you have accumulated the savings to cover it responsibly, control the desire to spend. “A large purchase, a car or otherwise, can affect your mortgage terms when the time comes to seek financing,” says Matthew Rand, Managing Partner of Better Homes and Gardens Rand Realty. After applications are submitted and the numbers are crunched, your extra loan payment will affect the terms you wind up receiving when all is said and done. “The less complicated your finances appear to the loan officer, the better off you will be.”

Avoid any unnecessary moving around of money as well. When a lender reviews your finances for approval, one of the major concerns will be the source of your down payment, closing costs, etc. You’ll also need to provide statements for the last two or three months on any assets. “If you have moved money around recently, there may be large deposits and withdrawals on your accounts, which will make it difficult for the lender to properly document,” says Rand. “Try to leave your money where it is until after you speak with a loan officer; this includes not changing banks either.”

If you can prevent it, don’t voluntarily change jobs while trying to purchase or close on a house. Again, the source of your income is extremely important to a lender. If there is any question about where your money will be coming from, it could put your deal in jeopardy and increase your level of risk to the lender. Although sometimes a change in jobs is unforeseen and unpreventable, try to close your deal before making a professional move. “You need the lender to be confident in your ability to pay back the loan. Showing a long history of steady income is crucial to your success as a buyer,” says Rand.

By appropriately planning and making smart financial decisions throughout the buying process, you will experience less hurdles and a much more efficient transaction.

Reposted from The Rand Blog

Yes Virginia, there “is” a Santa Claus.  Well that’s how I felt yesterday when I saw that mortgage interest rates had adjusted downward again.  Below is a reprint from the Freddie Mac Site, but I saw that Provident Bank yesterday had a 30 year conforming rate of 4.875 (with 1 point).  I had an email from a colleague where they saw a mortgage broker at 4.75 with no points.  So . . . let the games begin!

Compilation of Weekly Survey Releases for 2008

There are other positive signs in the marketplace as well.  Remember the huge bailout plan to purchase troubled mortgages?  Well part of that plan is being shelved.  Lawrence Yun, NAR Chief Economist writes (Source GHVmls economic and market watch report/Oct) that “Instead the money will be used to support securitization for consumer financing.”  Yun adds that the goal is to get capital to lenders so that they can start issuing loans to consumers and companies.  Yun shares that LIBOR rates (the key rate measurement of liquidity flow in the financial system) have begun to thaw.  But those stubborn residential mortgage rates carry a high spread above Treasury rates, commercial mortgage loans are non-existent and the banks are still not lending to small businesses.

The notwithstanding the above information, the most important thing I want to communicate is YES THERE ARE LOANS OUT THERE ! If you have good credit, (read my post on FICO Scores here)a stable job and some $ to put down, you can get mortgage money.   Property values have digressed to levels not seen in years.  Improved affordability has led to improved home sales.  The huge inventory is being worked off.  As I’ve told you for months now, a shrinking inventory is another sign that the real estate market is stabilizing.  Yun goes on to warn though that while these signs are encouraging, more must be done.

NAR, the National Association of Realtors has proposed that the government buy-down mortgage interest rates to ensure fixed low rates for home buyers.  NAR has also presented a plan to Congress that would eliminate the repayment feature of that $7500.00 first-time home buyer tax credit.  NAR has proposed that this credit be offered to all buyers and that higher FHA and conventional loan limits be made permanent.  This should greatly aid in the housing recovery.

We all know that consumer confidence is at an all time low, but we also know from history that the journey to wealth accumulation begins with owning ones own home.