In this episode of The #AskJulieC Real Estate Show Lizy Hoeffer Irvine and I talk timelines! Have you ever wondered what an escrow period is? Or why it's necessary? Or are you curious as to when you should go under contract in order to close by your preferred date? These are all common dilemmas that we address here!
If you’re looking to go under contract in a certain time frame, when should you reach out for a qualification?
If you’re concerned with anything that has to do with credit, income or assets, it’s best to start 6 months to a year before you plan to start moving. If there are any challenges, we want to address them before you need to move. Some credit plans can take up to a year, other people may need to save down payment funds or frequent job changes and those things can be a factor in qualifying. If you have good credit, have had your job for at least two years and you have a down payment; you should try at least 4 months before when you need to move.
Why do you need to start so early?
It can take 30 -60 and even sometimes 90 days to find your property. It takes 30-45 days to close. That’s essentially four months if you’ve waited the entire time. You may have a lease that is up in April but you found a property in January you could negotiate a 45-60 day close of escrow to avoid any early termination fees.
What does locking in a rate actually entail? If you lock in a rate can you re-lock it later when the market goes down?
Locking in a rate can be tricky. A rate lock typically stays good for a period of 30-60 days. Most lenders will lock in for 60 days. The reason you would want to lock in would be to set it in your payment terms. The trick is that you can’t always relock once you’ve locked in. Guild Mortgage will occasionally do what is called a float down (when the market drops below more than a quarter of what it is when you lock) but most companies have strict lock policies. What is challenging about this is a quarter is going to make a small change in payment difference, but you can’t predict where the market is going to go.
Is there anything else you feel people should know when people go into the home buying process?
Yes! There are three things that I think every home owner should know.
Maintain an on-time payment history! Address any and all collections you may receive in the mail IMMEDIATELY. Anything that affects credit can impact the home loan process. Don’t apply for any debts! Save that new car or new furniture for after you have closed. Any credit checks may or potential payment can delay closing.
Employment! We need a stable job history in order to qualify you. If you are job hopping or just received the dream job offer, talk to your loan officer. A change in income structure or pay rate can also have an impact on whether or not you get qualified.
Large cash deposits! If you have money saved at home it is challenging for us to use unless you have a documented history where you have pulled this money out of your account for a set amount of time. The same pertains to cash gifts. We have to document all assets for home loan and they need to be verified.
Thanks so much to Lizy Hoeffer Irvine for sitting down and discussing these things with us today! The market is on FIRE! Now is the time to make some moves and set you and your family up for your future! There are tons of tools at your disposal, and I have plenty of information to share... so message me today and we will start weighing your options!