Checklist for Buying, Building or Refinancing

Wednesday, June 8, 2016

If a move, move-up, down-size or construction project is in the near future, then preparation is very important for getting the right and best mortgage loan for you.

A few simple steps can often make the process smoother and even help you obtain a better rate.

Credit Score

A couple of things can have a major impact on your credit score, and these issues are not necessarily even derogatory items. First, any new credit, such as a new credit card or car loan, can take a credit score down temporarily. So time the purchase of that new car or the opening of a credit card after the home purchasing process. Also, high credit card balances relative to the available balance will most likely take that score down as well. Even if the card has a zero interest rate or if it is paid in full each month, the amount of credit used can still be a negative when it comes to credit scores. Keep in mind the report is a snapshot in time and does not know if a card is paid in full each month. It is a good practice to pull and review your credit report annually.

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Funds for Closing

Acceptable and documented funds for closing is critical for qualifying. Many sources are acceptable funds, including savings, retirement funds and, in many cases, gift funds from family. If timed enough in advance, equity in a current home can provide funds for purchase of the next home. This is what is often referred to as “bridge financing”. While the actual definition of bridge financing is a little different, the idea is the same.

Tax filings

Given it is the height of tax time, a few tax-filing tactics can make all the difference. First, if the income from 2015 is needed to qualify, the returns need to be completed and filed with the IRS. Electronic filing is the key! With recent security attacks on the IRS, the best and fastest way to obtain the needed documentation for a mortgage is electronic acceptance by the IRS. Until the final deadline, the use of 2013 and 2014 returns is also acceptable — provided the extensions have been filed in a timely manner.

Your lending and real estate team

With the proliferation of information and providers available directly through the internet, an online lender may seem like the way to go. There are large national providers that offer “one-button” access to your financing. The planning, process and execution are still reliant on the right people supporting throughout. It is the advice, hand-holding and encouragement that make all the difference in the world.

If a purchase, build or refinance is in the plans anytime in the next year, now is the time to enlist the help of an experienced, local and caring professional. If I can assist in any way, please reach out today.

Linda L. Rudd, CFP®, Vice President and Senior Loan Officer with Legacy Mutual Mortgage, brings more than 25 years of accomplished lending to her clients. With a strong history in this ever-changing and challenging market, Rudd delivers a broad understanding of the right mortgage to suit a variety of financial needs, from the first-time home buyer to the seasoned or luxury buyer. Contact Rudd at 210-999-5935 or