Fannie Mae has created a new interactive video where you control the outcome of the story based on your answers.  It basically lets you role play through your financial situation.  I played with it for awhile and it does actually have some solid points.  It is at least a different way to look at your financial situation and thankfully they are honest.  Check it out
http://www.knowyouroptions.com/ways-home

I would recommend this for Realtors to send past clients to if that client is now in trouble. It answers the questions in a safe, non threatening way and the entire website is a resource that will help your clients.

In this case however where it was brought up it was not a compliment.  I got the “well Jenn, you are conservative..”  This comment was made in regards to how I qualify my clients and conduct my business.  Keep in mind this was after I had warned a Realtor that they were shopping $100,000 out of the clients price and comfort range.

Let me be blunt.  I feel that a person should be able to afford the house they would like to buy.  Apparently, the notion that people should be able to afford where they live is a “conservative” view point. I pride myself knowing that Julie and I do everything possible to make sure our clients are in a comfortable financial position so that they do not have to decide between feeding their family and paying their mortgage. Even in our restricted marketplace there is still the ability to get people into trouble by maxing the guidelines and stretching the truth.  We do neither and never will.

Having a home should be a benefit not a burden.  By actually being able to afford the home you live in it can benefit and enrich your life.  We have all seen what a home burden can be as evidenced by the millions losing their homes every day.

If you are comfortable paying $5000 a month for housing, stay at that even if your mortgage person says you can afford $8000.   Remeber you are the one who will write the check every month, not the mortgage person.

If you are purchasing or refinancing a home with a loan (not FHA)

DO NOT BUY ANYTHING WITH YOUR CREDIT CARDS.

As of June 1st Fannie Mae is requiring lenders to check the borrowers credit right before funding.  If anything changes on your credit your loan that you already have signed loan documents on could be denied.   In order to protect yourself

1) DO NOT BUY ANYTHING WITH YOUR CREDIT CARDS OR OPEN NEW LINES OF CREDIT.

2) PAY YOUR CREDIT CARDS ON TIME

3) DO NOT ALLOW ANYONE TO RUN YOUR CREDIT.

By following the three above rules you will have no problems.  If you decide to go against any of the above you could be setting yourself up for disaster.

There are two issue with this. 

#1 misrepresenting income or continuance of income is fraud.  Mortgage fraud is very serious and carries severe penalties.

 #2 the bank would find out because every single lender verifies employment right before the loan funds.  If the lender finds out there is no longer a job and the borrower does not qualify without it the buyer loses the loan and generally their deposit as well.

There are 3  ways employment is verified on every loan.

#1 Current paystubs and w2′s

#2 The loan processor requests a written or verbal verification of employment before the loan is submitted to underwriting.  They contact your employer directly for this

#3 Verbal verification of employment at Funding.  They will not fund the loan unless your employer verifies you are still working there.

If you are leaving your job and do not have another job lined up you should not be using that income to qualify for your loan.  If you switch jobs in the middle of the loan you need to tell your lender so that they can adjust the transaction.  Many people think that if they get through underwriting and they sign loan documents they are in the clear.  You are not in the clear until the loan closes and the house has recorded./  Honesty is the best policy.  If you are working with a lender that is encouraging you to misrepresent yourself leave that lender quick.  Mortgage fraud is serious and no house is worth it.

As the Real Estate and financial markets continue to move up and down, mortgage rates can also be affected. Since mortgage rates are more closely tied to the bond markets, an up or down move in the stock market may not have the result in mortgage rates that one might expects. In fact, many times the resulting mortgage rate changes are counter-intuitive.

More importantly, rates change daily and they can change quickly. Some mortgage professionals have recently noted that their rate quotes have only had shelf lives of three to four hours before market changes have deemed them inaccurate.

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How does a consumer navigate fast changing markets in order to refinance their existing loan or purchase a home with the most favorable terms possible?

1. Plan – Define your needs ahead of time, do not wait until the last minute. This is especially true of home purchases.
2. Consult – Talk to your mortgage professional on a regular basis so they can interpret recent market events to you and communicate how those events can affect you.
3. Execute – When you have defined your needs and have determined that now is the best time to move forward, don’t shop yourself out of a good loan! What does this mean? It is easy to get caught up in shopping for the best rate, but it is not uncommon for home owners to miss locking their loan at a great rate because they are in search of better rates that do not exist or that they do not qualify for. It is important to shop to insure you are getting the best rate possible, but set limits to the number of companies you are going to consider doing business with and be careful of having your credit report needlessly and more times than is necessary!