What Should Home Buyers Do Under Tight Credit?

article top
This is Hawaii Loa Ridge home (MLS# 1015065) is currently available for $3,875,000.00
This is Hawaii Loa Ridge home (MLS# 1015065) is currently available for $3,875,000.00

BY YVONNE SHEN RUBES, R-– February existing home sales decline following sustained gains. Mr. Lawarence Yun, NAR, chief economist, experts an uneven recovery. He said, “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers.”

Under current “tight credit” conditions, buyers should look into loan availability as soon as they decide they want to buy. Despite very affordable mortgage interest rates, credit remains a challenge. Buyers should check their personal credit and mortgage availability in their area.


The following tips are for buyers, especially first time buyers, for preparing to buy home:

  1. Paycheck—Buyer’s purchase price ranges are determined in part by their income.
  2. Two months’ bank account statements—Buyer’s lenders require proof of regular income and proof that the down payment money is your own.
  3. Two years of W-2 forms or tax returns—Banks want to see a stable, long-term income for the amount on which you pay taxes (attention: all business owners!)
  4. Update everything—Things change and because the time period between the first loan application and closing can be many months—even years (special in short sale) on today’s market. During the time between contract and closing, it’s not at all unusual for underwriters to demand buyers apply updated mortgage statements, checks stabs, and so on. It’s quite common for them to call your office the day before closing to request a last minute verification of employment.
  5. Gift letters—Buyers using gift money toward their own payment. The bank wants to be sure the gift came from a relative, and is their own money to give. They also want the relative to confirm in writing that it’s a gift, not a loan—a loan would need to be factored into your debt load.

Need more information of purchasing a home? Contact me, I’ll go through every detail of the purchasing process with you. More on https://www.hawaiilife.com