Though the real estate market has certainly rebounded this year, there are still many obstacles that can get in the way of obtaining a home loan.
If you’re deep into your house hunt—or in contract on a property—here’s some advice: Don’t buy the BMW just yet.
Lenders are now running “credit refreshes” on the day of funding. This means that before a lender will transfer loan money into the escrow account so that you can complete your purchase, the lender is running a new credit report to see if anything has changed since the credit report at loan approval was issued.
Worst-case scenario is that you no longer qualify for the loan, or the file may have to go back to underwriting, which will delay closing.
The best way to avoid this issue is to avoid buying appliances, furniture, cars or other large purchases using credit prior to recording your new loan. And if you do so after your preapproval is completed and you’re simply house hunting, make sure you update your lender so you have a realistic sense for what you can afford based on your fresh score. (Thanks to my colleagues at Guarantee Mortgage for pointing out this helpful advice.)
If you’re 55 or older and are interested in moving within San Francisco or to another county, there’s a good possibility you can take your property tax base with you. That’s a huge benefit, as property tax bases are a large homeownership expense.
Propositions 60 and 90 are constitutional amendments passed by California voters that allow homeowners aged 55 and over to transfer their property tax base when purchasing a new principal residence. Your replacement home must be of equal or lesser current market value than the original property. And you can only do this once. Prop 60 allows transfers of base year values within the same county, and Prop 90 allows transfers from one county to another.… Continue Reading