Tuesday, May 29, 2012

Q: We did as you suggestedand applied to a lender to get our pre-approval for a loan.

I can’t believe everything the lender wants from us! They asked for two years of tax returns, two months of our pay stubs, money to pay for a credit check, all of our bank statements for a couple of months and the latest reports of our IRA’s and any other savings or investments. Is that legal? Can they sell that information?
Is it safe? Do they all do that?

A:  All lenders will ask for this information. They need it to get a complete picture of you financially. Many of the stricter standards for lending are a result of the melt down we experienced that started the recession. Lenders were making shaky loans to people who really couldn’t afford to pay them back. The banks didn’t ask for sufficient documentation and we are all still paying the price for those mistakes.

There are privacy policy statements in the paperwork you probably received from the lender. Check through it and I’m sure you’ll discover that they are protecting your privacy. They won’t be selling the information and will share information only with those entities that need it to complete the application.

I think it’s a good idea for everyone to have their financial documents organized and easily accessible in one file. Part of the “hassle” of applying for a loan for most people is the process of having to dig through their stuff to find all the paperwork. If we all organized this information it would be easy to keep it updated and handy.

Getting pre-approved is such an important step to take before you even begin to look for a home. Once you are finished with that process you’ll have a better idea of what you can afford to spend on a home and what your monthly housing costs will be. Remember to add tax and insurance to the principal and interest payments to get a true picture of your mortgage payment

Monday, May 07, 2012

Q: We were out with you a week ago and saw several homes, but are very disappointed with the choices thus far.

So many homes are not well built.  When do you expect a few better places will become available?

A:  First, let me say that there is no way to really know what homes or how many will become available, or their price.  Also keep in mind that we sell only about 100 homes a year on Vashon so the selection will always be small.

  In addition, I think you may be getting confused about terminology.  Most homes are built to the code that was in effect when the homes was constructed.  Basically a 2 X 4 is a 2 X 4. In other words, basic construction is very similar from one house to the next. Of course the condition of each house reflects the care it’s been given over time. From your comments during our showings I would guess you are really talking about finish work. A floor that is carpeted is just as structurally sound as one with another types of flooring, it just looks different. If the flooring is bamboo or slate, tile or hardwood it’s a more expensive floor but not necessarily a better constructed floor.

Finish work often costs at least a third of the price of building a home. It’s common that people who are building don’t save back enough money for fine finish work so they settle for less expensive cabinets, floor coverings and fixtures. These are things that can be up graded later. The home is still a well built place to live.

The higher the price, in most cases, the better quality the finish work will be. But even in high end homes the taste of the current owners may not be to your taste at all. The house could have beautiful, expensive woodwork, trim and fixtures and you would still want to change them. I would recommend you get a home in as good a basic condition as you can afford and then add your special touches later