Debbie Bloyd is a contributing author to Weekly Real Estate News and can be contacted at 469-768-0337 or [email protected]
Yesterday was maddening! I spent a lot of time on the phone with a client and his mom. Another first-time homebuyer with too much help from people that have not purchased a home in over 20 years. IT IS NOT THE SAME AS IT WAS! Lol – for you that don’t know that reference – it’s from TikTok. Yes – I hear all the same things over and over on TikTok –
Everything matters – It matters how you are paid – cash – we can’t use that – 1099 can use that. If you have a second job – you must prove that you have had that second job for at least two years. The biggest issue most people have is that they can’t always prove what they say. This clients Mom kept saying that he was employed by her company, and she paid him cash. We can’t use cash. The he told me that he was issued a 1099. That is totally different. You can pay cash but if you are 1099’d then that is what we use. It does not matter if that is a check or cash. I finally told her words matter. She thought she was helping but just the opposite happened.
Another issue with today’s younger clients is that their parents say that they have no credit. His MOM said that he did not have credit, but I found that he had a car payment in his name and a student loan – so yes – he has credit. I am not sure that everyone understands that credit is issued, and you pay bills – then you have a score. Some of my older clients have paid for everything for their kids and while that is great – it doesn’t allow them to establish credit.
I had another client that called me to ask if he could get a mortgage – he was newly self-employed under 3 months. No! You must have that 1099, self-employment income for two tax years and have filed tax returns with that job. Many people are just too wishy-washy with the dates. Nine months is not 1 year, and they are getting caught up with the details. Details that we need to prove are very, very important.
Eventually we kept talking and he did not want a primary house, he wanted an investment property. Another story all together when it is not a primary home. You CAN buy a rental home with almost no documentation on your income and job. There is a loan that allows you to be qualified with just the income off the rental monies from the house that you are purchasing – as long as the rents are more than the principle, interest, taxes and insurance – you GET THE HOUSE!!!!
This is the modern day – no documentation loan from the early 2000’s. Yes – there are many ways to get a loan today, but it seems harder and harder to get people to understand the basics of money. Money can’t be cash; it must be in a bank account with your name on it. If it is in an account with someone else’s name – it is now a gift, and we enter into an other long discussion of proof of that money with bank statements to prove it. The client’s mom from this week said that her son had the down payment money in his account. I asked him about his accounts, and it was not there. I kept asking where the down payment money and it turns out, it is in his mom’s account and she was going to move it to his account. She really did not understand that she was messing this all up from a financial standpoint.
So moral of the story this week – Before you start moving money and looking for properties – please call a mortgage broker and let them go thru the process with you. Things have certainly changed over the last few years and even the last couple of months…. Hang on – it is going to be a bumpy ride this year.
This article is an overview for a general educational purpose only. The information presented should not be relied upon without the advice of counsel.
Debbie Bloyd is a contributing author to Weekly Real Estate News. She can be contacted at 469-768-0337 or [email protected]