Blank Buyer Financial Information PDF Template

Frequently asked questions about the Buyer Financial Information form:

1. What is the purpose of the Buyer Financial Information form?

   The Buyer Financial Information form, recommended by the Pennsylvania Association of REALTORS® (PAR), is designed to collect crucial financial details from potential buyers. This information helps determine a buyer's financial capability to purchase property. It includes details on assets, liabilities, current and previous employment, annual income, and any factors that may affect the buyer's ability to finance the purchase, such as bankruptcy history or obligations to pay support.

2. Is it mandatory to fill out all sections of the form?

   Yes, all sections relevant to your purchase must be completed. This includes personal information for all buyers involved, financial details such as assets and liabilities, employment information, and any additional relevant information that impacts your ability to secure financing or complete the purchase. Certain sections are specifically required if the purchase involves mortgage financing.

3. What happens if I have declared bankruptcy or have had foreclosure in the past?

   You are required to disclose if you have declared bankruptcy, suffered foreclosure, had accounts collected, experienced late payments, or faced any legal actions that could affect your financing abilities within the last 7 years. Detailed explanations must be provided for any "yes" responses. This information is crucial for assessing your financial stability and eligibility for a mortgage or other financing options.

4. How should I report assets and liabilities?

   When reporting assets, include all liquid assets such as bank accounts and stocks. Liability information should encompass all outstanding debts including, but not limited to, alimony or child/spousal support. Each asset and liability must be clearly listed with corresponding values to accurately represent your financial position.

5. What does "Real Estate Currently Owned" section entail?

   This section requires you to list any real estate you currently own, including the address, the current market value, monthly payment, and the remaining mortgage or equity loan balance. This information provides a more complete view of your financial obligations and assets.

6. Can the information I provide be shared?

   By signing the form, you authorize the broker (whether acting for the seller, buyer, or as a transaction licensee) to obtain and share your financial and credit information with relevant parties involved in the transaction. This includes, but is not limited to, sellers, cooperating brokers, mortgage brokers, and lenders. It's important to note that while the broker can control the distribution of your information to these parties, they cannot control subsequent use or disclosure.

7. What are the implications of providing incorrect information?

   Providing truthful and accurate information is imperative. Any failure to do so may lead to the forfeiture of deposits, financial losses, or other penalties. The information you provide is used as a basis for accepting or rejecting an offer and for the placement of a mortgage loan; therefore, accuracy is crucial to avoid any negative outcomes in the transaction process.

1. Not accurately disclosing current and previous employment details, including the years at each job, can lead to a misrepresentation of the buyer's financial stability.

2. Failure to list all assets, such as bank accounts, stocks, etc., for each buyer accurately, thereby underrepresenting the buyer's true financial capability.

3. Omitting or inaccurately reporting any liabilities, including alimony or child/spousal support, can affect the assessment of the buyer's financial obligation and repayment capability.

4. Incorrectly stating the intention to occupy the premises may lead to a misunderstanding about the buyer's qualifications for certain types of mortgages or financial benefits.

5. Not being forthcoming about any financial adversities, such as bankruptcy, foreclosure, or history of late payments within the last 7 years, which is crucial for evaluating the buyer's financial reliability.

6. Failing to disclose whether any part of the purchase price or settlement costs is being obtained from sources other than those shown, which could potentially hide important aspects of the buyer's financial health.

7. Neglecting to provide information about real estate currently owned, including address, value, monthly payments, and mortgage/equity loan balances, which is necessary to assess the buyer's existing financial commitments.

By avoiding these mistakes, buyers can present a more accurate and complete picture of their financial situation, increasing the likelihood of a favorable assessment.

When preparing for a property purchase, buyers and their agents use a variety of forms and documents in addition to the Buyer Financial Information form. These documents are essential for completing the transaction and ensuring all parties are well-informed about the financial aspects of the deal. Here are five common forms and documents that are often used in conjunction with the Buyer Financial Information form:

• Pre-approval letter: This document, issued by a lender, indicates how much money the lender is tentatively willing to loan to the buyer, based on an initial review of the buyer's creditworthiness. It shows sellers that the buyer has the financial backing to make a purchase.
• Purchase Agreement: This legal document outlines the terms and conditions of the sale, including the purchase price, closing details, and any contingencies that must be met before the sale can be completed. It is a binding agreement between buyer and seller.
• Property Disclosure Statement: Completed by the seller, this form discloses information about the property's condition, including any known defects or issues. It helps buyers understand what they are purchasing and any potential problems that may need attention.
• Title Insurance Policy: This ensures against financial loss from defects in the title to the property and from the invalidity or unenforceability of mortgage loans. It provides peace of mind by protecting the buyer's and lender's interest in the property.
• Home Inspection Report: This report, generated by a professional home inspector, provides a detailed analysis of the property's physical condition. It covers various systems and components, giving the buyer a comprehensive overview of the property’s state.

Together, these documents, alongside the Buyer Financial Information form, create a comprehensive overview of a property transaction, enabling all parties to proceed with clarity and confidence. By understanding the role and importance of each document, buyers can navigate the purchase process more effectively, ensuring a smoother transition to their new home.

• The Mortgage Application Form shares similarities with the Buyer Financial Information form by requiring detailed data about applicants' employment, income, and assets. Both forms assess financial stability and the ability to meet financial obligations, crucial for lenders to determine mortgage eligibility.

• Credit Report Authorization Form is akin to the requirement within the Buyer Financial Information form that permits the broker to obtain credit reports. This process involves evaluating credit history, ensuring buyers have a responsible credit usage pattern, influencing their real estate purchase capabilities.

• The Personal Financial Statement document closely aligns with sections detailing assets and liabilities, providing a snapshot of an individual's net worth. This comprehensive overview supports various financial assessments, including loan considerations and financial planning in related real estate transactions.

• A Rental Application bears resemblance in gathering applicant’s financial and employment information to ascertain their ability to afford rental obligations. Similarly, it includes questions about past financial challenges that might impact the current financial responsibility assessment.

• The Loan Pre-approval Application parallels the financial scrutiny observed in the Buyer Financial Information form. This form examines debt-to-income ratios, employment history, and creditworthiness to pre-approve buyers for a specific loan amount before they commit to a property purchase.

• Income Verification Form complements sections of the Buyer Financial Information form by requiring proof of income through documents or an employer’s verification to confirm the buyers’ financial declarations. This ensures a reliable measure of their capacity to afford the property.

• Similar to the asset declarations in the Buyer Financial Information form, the Asset Verification Form is required in various financing situations to authenticate the existence and value of assets claimed, reinforcing the buyers' financial position.

• The Debt-to-Income Ratio Calculation Form reflects the liabilities section, helping to evaluate whether a buyer has a healthy balance between debt and income. This ratio is crucial for lenders to understand if the buyer can comfortably absorb new debts.

• An Alimony or Child Support Declaration Form is specifically comparable to queries about obligations towards support payments. This form confirms whether such payments exist, impacting the overall financial assessment by acknowledging fixed outgoings.

When filling out the Buyer Financial Information form, it’s crucial to approach the process with diligence and honesty. The form, recommended by the Pennsylvania Association of Realtors®, is designed to assess a buyer's financial capability to make a purchase. To help navigate the completion of this form, here is a list of dos and don'ts:

1. Review the entire form before beginning to ensure you understand what information is required.

2. Be honest and accurate in all your responses. False information can lead to serious legal consequences.

3. Include all sources of income and assets, including secondary or part-time employment, to provide a comprehensive picture of your financial status.

4. Disclose any past financial difficulties, such as bankruptcy or foreclosure, as these will need to be explained in detail.

5. Obtain documentation for all figures reported, such as bank statements or pay stubs, as they may be required by the lender or seller.

6. Sign and date the form to authenticate it, acknowledging the truthfulness and accuracy of the information provided.

1. Omit any liabilities or debts. This includes personal loans, credit card debt, alimony, or child support obligations.

2. Underestimate expenses or overestimate income. This can lead to challenges in securing financing and could jeopardize the transaction.

3. Forget to list any real estate currently owned, including corresponding mortgages or equity loans, as this is critical for assessing your financial obligations.

4. Leave sections blank. If a section does not apply, indicate this with a “N/A” (not applicable) to demonstrate that the question was considered and answered.

5. Fail to explain any yes answers to questions about financial difficulties or sourcing of funds for the purchase. Details are necessary for a comprehensive assessment.

6. Wait until the last minute to fill out this form. Take your time to gather all the necessary information and documents to ensure accuracy.

• One common misconception is that the Buyer Financial Information form is only necessary for those purchasing homes with a mortgage. In reality, even cash buyers are required to disclose their financial situation to show they have the funds to cover the purchase price plus settlement costs.

• Many believe that only current financial obligations matter. However, the form also requires disclosure of past financial issues such as bankruptcies, foreclosures, collections, legal actions affecting financing, or any support obligations that might impact the buyer's financial stability.

• It's often misunderstood that personal financial details beyond assets and liabilities are not needed. Yet, employment information, including current and previous employers, annual income, and other sources of income like bonuses and commissions, are crucial for assessing the buyer's ability to maintain their financial commitment to the property.

• There's a misconception that the form's information is only shared with the real estate and lending agencies involved in the transaction. The truth is, by signing the form, buyers authorize the broker to obtain and share their financial and personal information with sellers, cooperating brokers, mortgage brokers, lenders, and even credit reporting agencies as necessary for completing the transaction.

• Some think that the information provided on the form has limited impact on the purchasing process. In fact, buyers affirm that the information is true and correct, understanding it forms the basis for the seller's acceptance or rejection of an offer. Providing false or inaccurate information can result in forfeiture of deposits and subject the buyer to other financial losses or penalties.

Filling out and using the Buyer Financial Information (BFI) form is a crucial step for individuals looking to purchase property through the Pennsylvania Association of REALTORS®. Understanding the significance and accurate completion of this form can facilitate a smoother real estate transaction. Here are five key takeaways to consider:

• The BFI form requires detailed financial information from prospective buyers to assess their ability to purchase the property. This includes queries about residence occupancy, financial hardships such as bankruptcy or foreclosures, and whether the purchase price or settlement costs are being financed through alternate sources not disclosed in the form.
• Transparency and honesty are paramount when providing information on the BFI form. Potential buyers must disclose any past financial difficulties, including bankruptcy, foreclosure, accounts sent to collections, late payments, or any legal actions that could impact their financing abilities. Failure to provide truthful information could lead not only to the rejection of an offer but also to potential legal repercussions.
• Disclosure of assets and liabilities is a critical component of the BFI form. Buyers are required to list their assets (such as bank accounts and stocks) and liabilities (including alimony or child/spousal support) to determine their net worth and ability to cover the down payment plus settlement costs for mortgage financing, or the purchase price plus settlement costs for cash sales.
• Employment information plays a vital role in the financial assessment. The form demands details regarding current and prior employment for all buyers involved, including their basic salary, overtime, bonuses, commissions, dividends, and interest income. This comprehensive income data aids in evaluating the buyers' financial stability and mortgage loan qualification.
• Authorization to verify financial information is a critical aspect of the BFI form. By signing the form, buyers grant permission for the involved brokers to obtain and share credit reports, consumer reports, criminal history reports, and more, with sellers, cooperating brokers, mortgage brokers, and lenders. It's integral to understand that once this information is disclosed to third parties, the original distributor has no control over its subsequent use or disclosure.

Comprehending these key facets of the Buyer Financial Information form not only empowers buyers by ensuring they are well-informed but also underscores the importance of accuracy and transparency in the home buying process. Properly completed, this document aids all parties involved in making informed decisions, thereby fostering a transparent and efficient real estate transaction.