#6 You Do Have Assets!




  

You may not think you have any or many assets but trust me, it’s an often misunderstood aspect of financial terminology.  You probably have -- or could easily have – some assets that can count well for you as you pull things together and try for a home loan.

By intention or by default, most of us have a few assets!  It’s important to understand what counts and qualifies, what does not ...and why!   Assets, in our context here, amount to funds available to you, and other qualifying items that constitute or potentially represent a value comparable to actual funds.

There are two primary categories for “assets” – those that are considered “liquid,” and those that are “non-liquid.”  No, that’s not doubletalk; it’s actually quite clear once you get the gist of it!   You might look at it this way: Liquid means immediately accessible and usable such as Savings in a bank, Settlement funds, a 401K or properly documented gifts from family members.   Non-liquid means not available unless or until converted, such as your vehicle(s), collections,receivables and real property.

As you can see, some aspects of Income and Assets can be closely related by adjacent and similar definition.  Together, your Income and Assets coalesce – uniting together by growth – as important elements individually and collectively.    Your qualified mortgage lender will work with you and guide you in developing solid Income/Asset organization, clarification and groundwork for acquiring your home loan.

Your most important role is to ask all your questions, carefully digest the answers, take the recommended steps advised, and when in doubt, ask again!   Some advice from your expert and experienced mortgage lender will be cautionary.   For instance:  Beware of liquidating your “assets” without guidance!  There is a right way that supports your goals; and, a wrong way that can stop your process in its tracks!

Perhaps you are the type of person who likes to have your information all lined up before you connect with any professional service.  Just as with your attorney or your medical doctor, you want to start well prepared with lists and data.  That’s good strategy as long as you are pretty well informed as to exactly what is needed.

But it’s unlike the doctor list -- where you have the personal experience and information about the current aches and pains; or the attorney list -- where you bring the grievance to them with first-hand facts.   Give yourself a break when you decide to connect with a mortgage lender.   That list is best if it contains questions about what you don’t know!

Thoroughly understanding the Big Three – Credit, Income and Assets – is important mainly because, once understood in the home mortgage context, you will have a better idea of how prepared you are in moving further toward your goal.  Your mortgage lender, on the other hand, will have a clear idea of what needs to be accomplished in order to get you to that goal.

Regardless of your individual preparatory status, there will be work to do!   In my next column, we will start cleaning house!  I will be offering some guidance on how to prepare for working with a mortgage lender, how to make each meeting count and how we will get you closer to acquiring that home loan.

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