Home Buyers

Should I get Pre Approved first?

• It is crucial to get pre-approved for a mortgage before attending an open house. Most sellers expect buyers to have a pre-approval letter and are more willing to negotiate the price with those who can prove they can obtain financing.

Requirements for pre-approval

1. Proof of income: Buyers generally must produced w-2 wage statements from the past two years, recent pay stubs that show income as well as year to date income, proof of any additional revenues such as alimony or bonuses, and the two most recent years' tax returns.
2. Proof of asset: The buyer needs bank statements and investment account statements to prove that they have the funds for the down payment and closing cost, as well as cash reserves.
3. Good Credit: Most lenders require a FICO of 620 or higher to approve a conventional loan and may require that score for a Federal housing administration loan. FHA guidelines allow approved borrowers with a 580 or higher score to pay as little as 3.5% down.
4. Employment verification: Lenders want to make sure that they lend money to buyers who have stable employment. A lender may wish to contact the previous employer if a buyer recently changed jobs
5. Other documentation: The lender will need to copy the borrower's driver's license and require the borrower's social security number and signature. Be prepared to have these documents in the pre-approval session.

Should I waive inspection?

• Waiving inspection can help your offer in a competitive market, but it's equally vital to understand what you are waiving. An inspection can be an essential factor in deciding if you want to move forward with your purchase based on the home's condition. It can also be an excellent opportunity to negotiate on the price. If you need to have an inspection done and find yourself in a competitive market, you can always ask to do a pre-inspection.

What is a Form 17 and is it important to receive one?

• Washington State requires sellers of residential real property to thoroughly disclose material facts on a form called the Residential Real Property Disclosure Statement. This form is helpful to the buyers in terms of understanding the seller's experience of living in the property. Occasionally you will come across a home that is exempt from filling out the Form 17- due to it being an estate sale.

VA Loan Benefits

• The primary advantage of VA loans is that they make it easier for veterans to secure financing and allow buyers to purchase a home with no down payment.

• Veterans will qualify for VA loans with lower income and credit scores than are required for conventional loans. VA loans also enable veteran homebuyers to avoid Private Mortgage Insurance (PMI) payments since the VA guarantees more than 20 percent of the loan.

Entitlements and Loan Costs

• The VA guarantees a portion of mortgages with “entitlements.” The basic entitlement is $36,000 or 25% of the total mortgage. Lenders will usually loan up to four times this amount. A basic entitlement allows veterans to purchase up to $144,000 home with no down payment.

COE and Other Requirements

• To qualify for a VA loan, veterans must first receive a Certificate of Eligibility (COE). Eligible veterans or family members will have met at least one of the following requirements:

  1. Are married to a service member who died in the line of duty or as a result of a service-related disabilit
  2. Have been an active member of the National Guard or Reserves for 6 years or more
  3. Served at least 181 days of active service during peacetime
  4. Served 90 consecutive days of active service during wartime

• You can request a COE from your lender, apply online at VA.gov or mail in this application. You’ll be required to provide supporting documentation. You can use the checklist below to make sure you have all the necessary paperwork.