(Editors disclaimer: This is a guest post from a paid sponsor of #LifeofaMedStudent and thus has a financial relationship with the website.)
Part one of this series was published earlier this week – read it here!
Six Steps to a Flawless Home Purchase – Part 2
- Obtain a Credit and Income Approval
A Pre-Approval is simply not enough for you to gamble your family’s new home on. You must get a full Credit and Income Approval. The importance of getting all credit and income documents into the hands of an underwriter as early in the process as possible cannot be overstated.
The thing to keep in mind is that the underwriter is the one who has the final say. Finding a seasoned loan officer who is experienced with doctors is a great first step, but at the end of the day, it doesn’t matter how good your loan officer thinks your file is because he or she is not the final decision maker. It’s not like a mom and dad situation where the underwriter and loan officer meet in the middle. It’s like a kid and parent situation and the parent in this situation is the underwriter. That’s where the buck stops. Get all of your income, new employment contracts, student loan changes and down payment documents all the way to the underwriter and insist on a full Credit and Income Approval. Once you have that, you’re ready to rock.
If you follow these first three steps of the six steps to a flawless home purchase, you should be in great shape. You can’t do any more mortgage due diligence than that. The only way you could be more prepared to buy a home is if you had the money in the bank and were prepared to write a check for the entire purchase price.
But there are a few more things you can do to ensure the rest of your transaction is flawless.
- Carefully Select Your Realtor
It is so important that this is not just someone who’s qualified in helping the average person move across town. You are looking for someone with relocation, ideally physician relocation experience. You should be able to find such realtors through an online search, via referral from the medical department you are joining, a colleague who has recently relocated to the area or through a referral from a loan officer specializing in physicians. If you can’t find a realtor with experience with physician relocation, then the next best thing is a realtor who specializes in relocation because that person will have a little more specialized knowledge of the potential pitfalls and be attuned to serving clients remotely.
Remember, the timing of your employment contract start date, relocation and remote closing all add complexity to the transaction. The realtor who is the biggest short sale or foreclosure specialist in the county might be capable of doing amazing things for his short sale clients, they may be busy and sell more homes than anyone. BUT that same busy realtor, if not experienced in the nuances of relocation, is more likely to forget the remote closing timeline and leave you keyless on move in day. I see it much more frequently than anyone would like.
A great realtor will map out the transaction with you, pull out a sheet of paper and talk through all the dates with you and map out the transaction. That way when he is structuring the offer and the deadlines, everything flows and matches, so you don’t get to the end of the deadline, and realize, you’re family is homeless for two weeks because of a delay on the seller’s side or because the Realtor and loan officer we’re not in communication about when your loan could close.
- Stay in Communication
Make sure everyone is on the same page and has the same dates in mind for the loan approval, wiring of closing funds, loan document signing and move-in date. This is especially important for relocating physicians who often have movers scheduled and a relatively short timeline to move in and get settled before starting their new position. Make it a point early in the transaction, even before you write-up your offer or go house hunting, to get your loan officer and Realtor on the same page. This is important that these two advisors are in communication about loan type, financing and appraisal deadlines, as well as the all-important closing and move in date.
What can happen in a transaction is that everybody gets focused one thing, like the appraisal or the outstanding final signed employment contract or whatever the potential hang up might be and they take their eye off the relocation piece and end up missing a date.
If you get into the habit of staying in communication with your realtor and loan officer throughout the transaction, you’ll prevent a lot of problems. It is as easy as firing off an email to both parties saying: “Hey, team, I’m selling my house on Wednesday and I’ll be in Ohio that day, I need to move in and have keys Friday afternoon for the Arizona home. Everybody on board, do you see any problems with those dates?”; “Hey, did you get everything you need from me? Is there anything else you need?”; “My financing appraisal deadline is coming up this Friday. Just wanted to make sure that was on everybody’s radar and we were not going to have any problems with that.”; “Hey, team, Just verifying that financing and appraisal deadline is next Monday, which means my earnest money is nonrefundable. Can you confirm we are good to pass this date?”; or “Hey, team, closing deadline is a week away. I’m confirming that everything is set and my family will be in a moving van on Wednesday.” For anything having to do with deadlines or the dates you will be traveling, I would recommend being in direct communication with both the Realtor and the loan officer.
The frequency of your communication may vary depending on the transaction, but I think once or twice a week is probably the recommended dosage. That’s not too much and not too little. If you send communications a couple times a day or daily, you’re going to drive everybody crazy.
Even if you are working with a great Realtor and loan officer team, keep in mind that things happen. The loan processor goes on vacation, the kids get sick, real-life stuff happens and things can slip through the cracks. As a consumer, if you’re not communicating what your expectations are with the deadlines, you’re leaving yourself open to possible mistakes.
Read part 3 of three-part series as it is posted later this week…
Josh Mettle is an industry leading author and mortgage lender, specializing in financing physicians, dentists, fellows, PhDs, and physician assistants. You can get more great physician real estate and mortgage advice at http://www.utahphysicianhomeloans.com/ or his book site: www.whyphysicianhomeloansfail.com. Josh is also a fourth generation real estate investor, and owns a number of rental homes, apartment units and mortgages. Josh is dedicated to helping physicians become more financially aware and able, download Josh’s latest tips and advice at www.physicianfinancialsuccess.com.