Free Buyer Financial Information Form in PDF

Instructions on Writing Buyer Financial Information

Filling out the Buyer Financial Information form is a critical step in the process of purchasing property. This form is designed to assess your financial capability to make the purchase. By providing accurate and truthful information, you facilitate a smoother transaction and help avoid potential delays. Accuracy and honesty on this form are imperative, as the information will be used to determine offer acceptance or rejection, may be shared with lenders for mortgage consideration, and inaccuracies could lead to loss of deposits or other financial penalties. Follow these steps to ensure that you correctly complete the form.

1. Enter the full legal names of both buyer 1 and buyer 2 (if applicable) in the designated fields.
2. Provide the current addresses for both buyers next to their names.
3. Answer whether you plan to occupy the premises by checking the appropriate box for Yes or No.
4. Disclose any financial challenges you've faced within the last 7 years, such as bankruptcy or foreclosure, by checking Yes or No. If Yes, provide a brief explanation as required.
5. Indicate whether any part of the purchase price or settlement costs will come from sources not listed in the form by checking Yes or No. If Yes, offer an explanation.
6. State if you have been obligated to pay support under a Pennsylvania court order since January 1, 1998, by checking Yes or No. If Yes, list the county and Domestic Relations File or Docket Number.
7. Reveal any outstanding arrearages for alimony, child, or spousal support by checking Yes or No. Provide explanations where applicable.
8. List assets for both buyers, including bank accounts and stocks, and calculate the total for each.
9. Detail all current liabilities for each buyer, including alimony or support payments, and compute the total monthly balance and payments.
10. For any real estate currently owned, fill in the address, value, monthly payment, and mortgage/equity loan balance for up to two properties.
11. Provide employment information for both buyers, including current and previous employers, job titles, and years employed.
12. Enter annual income details for each buyer, covering basic salary, overtime, bonuses, commissions, dividends, and interest. Sum these to give a total for each buyer and then a combined total income.
13. Review the additional information section, ensuring that all data is accurate and complete.
14. Check the box to authorize the broker to obtain, use, and disclose the necessary information and reports for processing your application.
15. Read and understand the acknowledgments and disclaimers regarding the information provided and its use.
16. Sign and date the form where indicated for each buyer to acknowledge receipt and submission of the financial information sheet.

Once completed, this form will play a key role in moving forward with your property purchase. It's vital to proceed with care, ensuring that every detail is accurate to avoid any unnecessary complications. Your detailed financial portrait allows all parties involved, including sellers and lenders, to evaluate and process your property purchase effectively.

What is the purpose of the Buyer's Financial Information form?

The Buyer's Financial Information form is designed to assess the financial capacity of potential buyers to purchase a property. It collects detailed information about the buyer's assets, liabilities, income, and employment to determine whether they can afford the property they intend to buy. This evaluation is crucial for sellers and lenders to gauge the financial readiness of the buyer.

Who should complete this form?

Individuals or parties interested in purchasing a property and who may require mortgage financing should complete this form. If the transaction involves more than one buyer, each buyer is required to provide their financial information to give a comprehensive overview of the purchasing capacity.

What information is required for the sections regarding assets and liabilities?

In the assets section, buyers must disclose details such as bank account balances, stocks, and other significant assets. For liabilities, all outstanding debts, including, but not limited to, alimony or child/spousal support payments, must be listed with current balances and monthly payment amounts. This detailed overview helps in understanding the financial position of the buyer(s).

Is it necessary to disclose personal employment information?

Yes, disclosure of employment information for all listed buyers is necessary if a mortgage loan is required. This includes current and prior employer details, job occupation, and duration of employment, along with annual income sources such as basic salary, overtime, bonuses, commissions, dividends, and interest. This information aids in establishing the stability and consistency of income, critical for loan approval.

What happens if a buyer has had bankruptcy, foreclosure, or other legal actions affecting their financing ability?

Buyers are required to disclose if they have experienced bankruptcy, foreclosure, had accounts sent for collection action, or had any legal actions that affected their ability to finance in the last 7 years. Detailed explanations for each situation must be provided. This transparency is crucial as it impacts the evaluation of the buyer's financial eligibility.

Can the purchase price or settlement costs come from sources not listed on the form?

If any portion of the purchase price or settlement costs is being obtained from sources not disclosed on the form, buyers must indicate so and provide an explanation. It’s essential to account for all funds involved in the transaction to ensure the buyer's financial transparency and integrity.

What assurances do buyers provide by signing the form?

By signing the form, buyers affirm that all provided information is true and accurate. They understand that the information is crucial for the seller's acceptance or rejection of their offer and may be shared with lenders for mortgage purposes. It’s acknowledged that failure to provide truthful information could lead to deposit forfeiture and other financial penalties.

Can this information be shared with third parties?

Yes, buyers expressly authorize the sharing of their financial information and any obtained reports with sellers, cooperating brokers, mortgage brokers, and lenders involved in the transaction or related transactions. However, it is also acknowledged that once this information is disclosed to a third party, the broker has no control over its use and cannot be held liable for any misuse or unauthorized disclosure.

What is the Buyer's Financial Information form's approval status?

The form is recommended and approved for use by members of the Pennsylvania Association of REALTORS® (PAR). However, its use is not restricted to members alone, indicating its reliability and effectiveness in gathering necessary financial details from prospective buyers.

Filling out the Buyer Financial Information (BFI) form requires attention to detail, accuracy, and complete honesty. However, mistakes can happen. One common error is failing to provide full disclosure of financial liabilities. Buyers might overlook or choose not to mention certain debts like personal loans or credit card balances. It's crucial to list all liabilities, as this information determines the buyer's financial capability to sustain a mortgage loan.

Another mistake involves inaccuracies in reporting annual income. Sometimes, buyers may not accurately calculate their total yearly earnings, forgetting to include bonuses, overtime pay, or dividends. This oversight could lead to a miscalculation of the buyer's financial health, ultimately affecting the approval for a mortgage loan.

A critical area that is often mishandled is the section about past financial difficulties. Questions regarding bankruptcy, foreclosure, collection actions, or late payments must be answered truthfully. Failure to disclose such important details can be construed as fraud and lead to severe consequences, including the loss of earnest money or legal action.

Incorrectly filling out the assets section is another common mistake. Buyers might not list all their assets or might not value them accurately. This error can lead to an underestimation of the buyer's net worth, potentially affecting the mortgage terms offered by lenders or even the decision on their loan approval.

Some buyers forget to update or provide details about real estate currently owned. This information is vital, especially if there are outstanding mortgages or equity loans on those properties. Lenders use this data to assess the buyer's existing financial obligations and how they impact the buyer’s ability to finance a new purchase.

Not providing information or providing inaccurate information about employment can also derail the application process. The employment section, which requires details about the buyer's current and past employers, occupation, and years at the job, is essential for lenders to evaluate stability and predict future income.

Last but not least, a prevalent issue is not authorizing the broker to obtain credit information. This authorization is crucial for the broker to carry out necessary credit checks and obtain reports that support the buyer's application. Without this consent, the broker might not be able to proceed with the verification process, delaying or even hindering the transaction.

When individuals are in the process of purchasing property, the Buyer Financial Information Form (BFI) serves as a crucial document for assessing their ability to finance the purchase. To further support and expedite this process, several additional forms and documents are often used in conjunction. These materials contribute to a comprehensive understanding of the buyer's financial standing and facilitate various aspects of the transaction.

• Pre-approval Letter: This letter from a lender estimates the amount of money a buyer is eligible to borrow before applying for a loan. It demonstrates the buyer's financial credibility and readiness to purchase.
• Proof of Funds: For cash purchases, this document verifies that the buyer has enough funds to cover the purchase price and any associated costs. It can be a bank statement or a letter from the bank.
• Credit Report: A detailed report of the buyer's credit history and current credit score, used by lenders to assess creditworthiness.
• Purchase Agreement: A legal document outlining the terms and conditions of the sale between the buyer and seller, including the agreed-upon purchase price.
• Title Report: This report provides a history of ownership, detailing any liens, encumbrances, or legal issues associated with the property. It ensures the property can be legally sold.
• Home Inspection Report: An assessment of the property’s condition by a professional inspector, identifying any issues that may need to be addressed before the sale can proceed.
• Appraisal Report: An evaluation performed by a certified appraiser to determine the property's market value, often required by lenders to ensure the loan amount does not exceed the property's worth.

Together, these documents offer a layered and detailed insight into the financial and physical aspects of the property under consideration. They enable all involved parties—buyers, sellers, and lenders—to proceed with the transaction with a clear understanding of all relevant factors. Proper preparation and compilation of these documents can streamline the purchasing process, making it smoother and more efficient for everyone involved.

The Buyer Financial Information form closely resembles a Mortgage Application Form, primarily due to the comprehensive financial details required from the prospective buyer to assess their eligibility for the loan. Both documents seek information on employment, annual income, assets, liabilities, and any real estate owned. This ensures lenders have a clear understanding of the buyer's financial health and ability to repay the mortgage, mirroring the form's intent to ascertain a buyer's capability to purchase a property.

Another analogous document is the Loan Pre-Approval Form often used by lending institutions to preliminarily assess a borrower’s creditworthiness before the actual loan approval process begins. Similar to the buyer financial information form, it collects detailed financial data, including income, debts, and assets, to gauge whether the applicant meets the lending criteria. Pre-approval forms, like the buyer financial information, play a crucial role in real estate transactions by providing sellers with confidence in the buyer's financial stability.

The Personal Financial Statement is also akin to the Buyer Financial Information form, as it provides a snapshot of an individual's financial health at a particular point in time. It details assets, liabilities, income, and expenses, mirroring the buyer form's sections covering these areas. Individuals often use personal financial statements for loan applications, financial planning, or even for securing leases, showcasing its versatility in financial assessments similar to that of the buyer financial form.

Credit Report Authorization forms share a resemblance with the Buyer Financial Information form, specifically in the section that seeks permission to obtain credit reports and other financial data from third parties. Both documents require the buyer's consent to access sensitive financial information, ensuring that lenders or sellers can verify the buyer's creditworthiness and financial history, which is essential for decision-making in property transactions.

The Income Verification Form is comparable in its demand for detailed proof of a buyer's earnings, including salary, bonuses, and other sources of income. This is crucial for both the income verification process and the Buyer Financial Information form, as it directly influences a buyer's perceived ability to fulfill financial commitments, whether for loan approvals or for seller reassurance in real estate dealings.

Similarities can be drawn to the Asset Declaration Form, which requires individuals to list their current assets, such as bank accounts, stocks, and real estate, akin to the assets section of the Buyer Financial Information form. Both documents aim to ascertain an individual's net worth, which is vital for assessing financial strength during significant transactions or applications.

Debt Disclosure Forms, much like the liabilities section of the Buyer Financial Information form, demand a comprehensive listing of all outstanding debts and obligations. This alignment underscores the importance of understanding an individual's debt-to-income ratio—a critical factor in evaluating loan eligibility and financial reliability in both contexts.

The Rental Application Form shares resemblances in the documentation of an applicant's financial status, including employment information and income verification. Though primarily used for leasing properties, it similarly aims to establish the applicant’s financial reliability and ability to meet payment obligations, just as the Buyer Financial Information form does for purchasing scenarios.

Lastly, the Child Support Declaration Form parallels the Buyer Financial Information form in that it inquires about obligations for spousal or child support. This is crucial, as such financial commitments can significantly impact an individual’s overall financial capacity and stability, influencing decisions in realms like mortgage lending and real estate purchases.

When filling out the Buyer Financial Information form, it's crucial to provide accurate and honest information. This form plays a significant role in the buying process, allowing sellers and lenders to assess your financial capabilities. Here are some do's and don'ts to keep in mind:

Do's:

• Review the form thoroughly before starting. Understanding each section ensures you know the type of information required, helping to avoid mistakes.
• Provide accurate information about your financial situation, including assets, liabilities, employment details, and income. False information can lead to serious consequences.
• Explain any financial difficulties you've had in the past, such as bankruptcies or foreclosures. Transparency about your financial history is critical for building trust.
• Use precise figures when reporting your income, debts, and assets. Estimates may lead to complications later, especially when lenders verify these details.

Don'ts:

• Leave sections blank if they apply to you. Incomplete information can delay the process or negatively influence the seller's decision.
• Overestimate your assets or income. This can lead to an offer that's unsustainable or problems with mortgage approval down the line.
• Forget to include all liabilities, including spousal or child support. Omitting such details can impact your credibility and affect your loan approval.
• Ignore instructions for explaining specific circumstances, such as the source of your down payment. Clarification is necessary for a complete understanding of your financial position.

Many people harbor misconceptions about the Buyer Financial Information (BFI) form, often stemming from unfamiliarity with the document's purpose and requirements. Understanding these misconceptions is crucial for buyers to navigate their property purchase effectively.

• Only buyers with perfect credit need to fill it out: It's a common misconception that the BFI form is only for buyers with flawless credit records. In reality, this form is designed to assess the financial ability of all buyers – regardless of their credit history – to ensure they can afford the property.
• It's optional to complete: Some buyers believe filling out the BFI form is optional. However, for transactions involving mortgage financing or where a clear financial picture is necessary, completing this form is typically a requirement.
• Personal information is at high risk of misuse: Concerns about personal information security are valid. However, the form includes clauses that authorize and direct how this information can be shared, and brokers are obligated to handle it responsibly.
• It replaces the need for a mortgage pre-approval: Filling out the BFI form is not the same as obtaining mortgage pre-approval. It's a tool used by sellers and agents to gauge financial capability, while mortgage pre-approval is a more detailed process undertaken by lenders.
• Income is the only factor considered: While income is an important aspect, the BFI form assesses a comprehensive range of financial details, including assets, liabilities, and any real estate currently owned, offering a full picture of the buyer's financial situation.
• All financial information must be disclosed: While it's important to be truthful, the form specifies that for purchases involving mortgage financing, at least a minimum net worth or amount equivalent to the purchase price plus settlement costs should be disclosed. This does not necessarily require disclosing every detail of one's financial situation.
• Bankruptcy or foreclosure disqualifies buyers: Having a bankruptcy or foreclosure in your history does not automatically disqualify you from buying a property. The BFI form simply asks for disclosure of such events to assess financial stability, not to disqualify a potential buyer.
• It's only for the Pennsylvania market: While the document mentions it's recommended for members of the Pennsylvania Association of REALTORS®, the practice of assessing a buyer's financial information is standard in real estate transactions across the United States.
• Signing the BFI form locks you into a deal: Some buyers mistakenly think that by signing the BFI form, they are committing to purchase the property. The form is actually just one step in the process, used for evaluating financial readiness, and does not bind the buyer to the transaction.

Understanding these misconceptions can help buyers approach the BFI form with confidence and ensure a smoother transaction process.

Completing the Buyer Financial Information (BFI) form entails thorough and precise disclosure of financial status by the buyers. This document, structured to evaluate a buyer's capability to complete a real estate purchase, requires a comprehensive account of a buyer's assets, liabilities, and income, alongside other pertinent financial details. Here are several key takeaways concerning its completion and utilization:

• Accuracy is paramount. Buyers must provide true and accurate information about their financial standing, including assets, liabilities, income, and employment details. Misrepresentation can lead to severe repercussions, including the potential loss of deposits.

• Disclosure of financial challenges. The form requires buyers to reveal past or current financial difficulties such as bankruptcy, foreclosure, or late payments, thereby allowing a transparent assessment of financial reliability.

• Explanation of alternative financing sources. If any portion of the purchase price or settlement costs is expected to come from sources not detailed in the BFI, buyers must disclose and explain these additional resources.

• Child or spousal support obligations. Buyers are queried about any existing child or spousal support obligations, underscoring the importance of such commitments in evaluating financial capacity.

• Liquid assets documentation. For a mortgage or cash purchase, disclosing liquid assets equivalent at least to the sum of the down payment plus settlement costs, or the purchase price plus settlement costs, respectively, is obligatory.

• Lending prerequisites. When a mortgage loan is part of the purchase, the BFI aids in proving the buyer's qualification for the loan by detailing their financial situation comprehensively.

• Authorization for information verification. Buyers express consent for the broker to acquire and share financial and credit information with involved parties like sellers, mortgage brokers, and lenders to facilitate the real estate transaction.

• Liability release. By signing the form, buyers acknowledge the broker's limited control over the disclosed information once it is passed to third parties, releasing the broker from liability related to the misuse or further sharing of said information.

Understanding and diligently completing the BFI is crucial for buyers to demonstrate their financial readiness and reliability in real estate transactions. This transparency aids in building trust among all parties involved and streamlines the purchasing process.