In the challenging housing market of today, buyers have to be aware of many factors that can make or break their chances of owning a home. Most of these are lender-related, as the lenders scramble to do everything within their power to assure they have buyers who will not default on mortgage payments in the future.

As a real estate agent I am privvy to the crazy hoops the lenders make buyers jump through, even at the eleventh hour when the loan is supposed to fund. The fact is that very few escrows close in 30 days now, even if all paperwork is finished and all parties are ready to go. Lenders can order credit inquiries or bank statements the day of funding (which I have seen happen), can provide escrow with alternate conditions that must be met at the last minute, and more. So if you are a buyer and you have that moving van booked for the weekend after closing, keep this in mind. Here are a few things you should be aware of:

Credit Card Information for the Appraisal Order: If you are obtaining a conventional or FHA loans, appraisals are ordered online through appraisal management companies’ websites. They must be paid at the time of ordering, so a credit card is required. VA appraisals are ordered directly through the VA and are charged to the buyer at closing.

Proof Earnest Money Deposit Cleared Account: Once the initial deposit clears the buyer’s bank account, a copy of the cancelled check, as well as an updated balance statement from that account, will be required by the lender. These funds can also be wired, but a post-transfer balance will still be needed.

Homeowners Insurance Quote: Homeowners insurance is part of the housing expense and is therefore factored into the debt-to-income ratios. Having an accurate quote as early as possible in the transaction is helpful. Remember that “walls in” coverage is now required on all condominiums as well, known as an HO6 policy (ask your mortgage officer to explain).

Letters of Explanation: If not already handled in the pre-approval process, buyers will need to explain any derogatory credit (no matter how old), any credit inquiries within the past 90 days and if they resulted in new accounts, any larger than normal bank deposits, job gaps, etc. Be prepared, as the lenders heavily scrutinize everything.

Gift Letter and Source of Funds of the Gift: Whenever the buyer is receiving a gift for the down payment and or closing costs, the donor must complete a gift letter and also provide a recent asset statement to source the gift. Some donors are reluctant to provide copies of their bank statements which can sometimes cause delays.

Updated Paystubs and Asset Statements: All income/asset documentation must be dated within 30 days of funding. Exceptions are quarterly asset statements. Also, online bank printouts are typically unacceptable unless they show the full account number and account holders name.

By the way, you may have heard about Fannie Mae’s Loan Quality Initiative which is yet another effort to reduce loan defaults. Lenders are now required to monitor a borrower’s credit throughout the transaction to make sure no new accounts are opened during escrow. A ‚Äúsoft‚Äù credit inquiry will be pulled at time of underwriting and any new accounts, or even any additional inquiries after the lender’s initial inquiry, will need to be explained.

It is important to keep in mind that anything you purchase will be scrutinized by the lender. Wait until escrow closes to purchase new furniture, appliances, household items or vehicles. Definitely do not purchase any big ticket items like cars or boats, or pay for future vacations.

If you have any additional questions about lender requirements or perspectives please contact your mortgage professional. Information in this article was provided by Kevin Kueneke of Primary Residential Mortgage. He can be reached at 760-500-1919. Thanks Kevin!