In home financing, as in pretty much all industries, a lot has changed lately. Historically low interest rates, and of course the impacts of COVID-19, have lenders a little more cautious than before. If you’re currently looking at purchasing a property, here are some things you should be prepared to do to make things go more smoothly.

• One of the things I have been experiencing lately is Sufficient Insurance Issues. That is to say, the property must be insured for at least the replacement cost value. If the insurance is insufficient, at closing we are having to revise insurance to increase it to meet this threshold. We order a Replacement Cost Estimator (RCE) and make sure it is consistent with appraisal but if you make sure your insurance matches the replacement cost ahead of time, it saves us that effort.

• Do NOT take out any new loans, or use credit cards above your normal use rate. You can spend as normal, but don’t do things like buy a car or a bunch of new furniture while you are in escrow.

• Alert your employer that you are buying a home, so they will be ready for two things: Written Verifications of Employment that come in the beginning and Verbal Verifications that come at the end. Grab cell numbers from your HR team so they can easily answer the phone after you sign your docs.

• Make sure your tax returns have been filed and any amounts due are paid. Save the proof that you paid your taxes, such as cancelled checks.

• If you are preparing to purchase, start to keep your assets in the same accounts. When lenders check the previous 2 months, they want to see consistency. Don’t move money around between accounts unnecessarily.

• Be prepared to write COVID-related letters that state your wages and employment are the same and have not been affected by the pandemic.

• If you are purchasing a home in one of the many FEMA-defined Disaster Areas (and the Bay Area is obviously a seismic zone), prepare to offer proof that the home is still sound. Even if you’ve had an inspection and/or an appraisal, the lender will want to know that nothing has happened between those reports and closing.

With a little advance preparedness, you can make sure your escrow goes more smoothly and lenders will look favorably on your file. If you have any questions, feel free to contact me, and I’d love to help out.