Understanding Bank Statements

Hey there, Caleb Patton with Broker Brothers Mortgage here. Congratulations on your pre-approval! Now, let's talk about what you should avoid to maintain that pre-approval. Long story short, don't make any financial changes without consulting us first. Here are a few examples: No New Debts: Don’t take out any new loans or lines of credit. Avoid buying a new car, boat, or financing purchases like new furniture or discounted items from department stores. Any new debt can impact your pre-approval. No Large Cash Deposits: Avoid making large cash deposits into your bank account. Regular paychecks, bonus pay, and tax refunds are fine as they are easily documented. However, if you sell a large personal asset to get extra money, it can be difficult to document. Always check with us first. No Job Changes: Avoid changing jobs or accepting promotions during this period. Even if a job change seems beneficial, it might impact your qualifications or income stability. Always consult with us before making any career changes.  Now is also a great time to review your budget. If you haven’t already, please check in with us. We'd love to discuss your budget, not just what you can buy, but what you should buy. We want to ensure you feel comfortable with your monthly payment obligations and any upfront costs associated with buying a house at your pre-approved amount.

Caleb Patton with Broker Brothers Mortgage here to talk to you about variable income. How your income is calculated matters immensely in the mortgage underwriting process, and many people misunderstand this. There are various ways we earn money, and many of them are not consistent. The easiest types of income to calculate are W-2 hourly or salary income. If you’re on a salary, this is ideal and straightforward to understand. This calculation is crucial as it affects how much home you can easily qualify for. If you’re an hourly employee consistently working 40 hours a week, this is also a non-variable and easy-to-calculate income source. However, many income sources are variable, starting with hourly employees who don’t consistently get 40 hours a week. For example, full-time nurses often work 12-hour shifts, three days a week, totaling 36 hours. According to many guidelines, this may not be considered a consistent full-time, non-variable income. If your income is variable because you’re not a consistent 40-hour-a-week employee, or if you have other types of pay like bonuses, commissions, self-employment income, or shift differentials, this income is often calculated on a two-year average. We need an average monthly income to determine your debt-to-income ratio, a key qualification factor alongside credit score and others. To calculate an average monthly income when it's not consistent, we often take it over a two-year period. Sometimes, it can be as little as one year, depending on the program, which is why brokers offer better options and flexibility. In general, we look at your income over two years. If it’s increasing year over year, we average it out over those two years to get your monthly average income for variable income.  There are nuances to this process, but these are the basics to understand and appreciate variable income.

Hey, Caleb Patton with Broker Brothers Mortgage here, and congratulations are in order! You just received an accepted purchase agreement. I want to give you an overview of what to expect next from us and our team. First, we will be registering a loan for you. You will receive a loan estimate, which provides a detailed estimate of everything related to your loan. Please review and electronically sign this as soon as possible. If you have any questions, let us know. Once you sign the loan estimate, we'll be able to order the title work and appraisal for you. Regarding the appraisal, a payment link will be sent to you. If you have a closing cost concession to cover this, an authorization form will be sent for you to pay only if the transaction does not close. Otherwise, your closing cost concession from the sellers will cover the appraisal cost. Next, you'll need to arrange for homeowners insurance. If you don't have an insurance provider, we can refer you to some great professionals in the industry who will take good care of you. Finally, you'll be hearing from the rest of my team. You may have already heard from Nate. You'll also hear from Laura Rineger, my senior production manager, who is excellent at what she does. If you hear from Laura or Nate, know they are part of my team and not someone trying to steal your identity. Please work with them just as you have with me, and we’ll ensure everything goes smoothly.  Congrats again, and we'll talk soon!

Caleb here with Broker Brothers Mortgage, wanting to talk to you about gift funds. If you are fortunate enough to receive funds from a friend or relative to help with your transaction, here are some important things to know. First and foremost, we need to document where this money came from and how it got to you. Here's what you need to know: Eligibility: Gift funds can be given by a blood relative, whether legal or biological. This is straightforward. However, if the giver is a family friend, it’s harder to document. Check with us to ensure they are eligible to give gift funds. Documentation: We need to show the origin and transfer of the money. This includes: A signed gift letter: We'll take care of this. Just provide the donor's email address and name, and we'll send them the form to sign, acknowledging they are gifting you the money. Bank statements: We need a bank statement from the donor showing where the money came from. Yes, this means a bank statement from the person giving you the money. Although this is your transaction, they are now legally involved and must provide this documentation. Copy of the check: We need a copy of the check used for the gift. Your bank statement: Finally, we need a bank statement showing you have deposited and received the money.  These are the basic steps to document gift funds properly. By following these steps, we can ensure everything is in order for your transaction.