Monthly Archives: October 2014

//October
31 10, 2014

Mortgage Application Checklist: What you’ll need to apply

October 31st, 2014|Blog, Buying a home, Tips & Advice|

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Once you find the perfect home, the next step is to apply for a mortgage. You will need to provide detailed information in order to receive your loan approval. Below is a list of standard documents that are required for just about everyone. Depending on your situation, you may be asked for more or less information. Use this checklist to help you prepare in advance, so the application process is quick and easy.

 

Mortgage Checklist

 

Personal Information

• Photo ID
• Proof of Social Security number (copy of SS card or W2 statement)
• Residence addresses for the past two years
• Copy of green card, if not a U.S. citizen

 

Employment

• Pay stubs (past 30 days)
• Names & addresses of each employer (last two years)
• W-2s (last two years)
• Tax returns: 2-year returns are required for the self-employed

 

Banking

• Three months of statements for: bank accounts, mutual funds and investment accounts
• Large deposits: explanation and source of deposit. If deposit was a gift you need: signed gift letter, copy of gift check and copy of deposit receipt.

 

Property Information (if in contract)

• Purchase agreement
• MLS sheet and legal description
• If you already sold your current home: need copy of settlement agreement
• If you are currently selling your home: need copy of listing contract
• Value of personal property and furniture

 

Business owner (own 25% or more of business)

• Corporate / Partnership tax returns

 

Self-employed

• Last two years of tax returns (with all pages and schedules)
• Profit and Loss statements (for current year) prepared by an accountant
• K1’s for last years for all S-Corps

 

Retired

• Pension award letter
• Social Security award letter

 

Rental Property

• Current rental agreements and tax returns (last two years)
• Child support as income
• Need copy of divorce settlement
• Need copies of cancelled child support checks (12 months)

 

Divorced

• Copy of divorce decree
• VA […]

24 10, 2014

4 Tips to Get a First Mortgage

October 24th, 2014|Blog, Buying a home, Tips & Advice|

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1. Get your credit in order

When applying for a home loan, your credit score has a big impact. So borrowers should do everything they can to boost their credit score before they apply for a mortgage. Paying down credit cards, paying your bills on time, and checking your credit report for mistakes are just some of the ways you can work to improve your credit score.

If you are thinking about buying a home in the near future, before you start house hunting or get pre-approved for a loan, it’s a good idea to check your credit report and find out what your credit score is. You are entitled to a free credit report once a year from each of the three credit bureaus – Equifax, TransUnion, and Experian, which you can access at www.annualcreditreport.com.

 

2. Know your down payment options

Coming up with a down payment can be the one of the biggest obstacles for first-time homebuyers. It can be challenging to save for a down payment, even if you have a steady income and decent credit score. But with the right planning and budgeting, you can reach your savings goals faster than you think. If you aren’t able to make a sizable down payment, another option is to use gift funds from a relative. As long as the borrower has 5% of their own money, gift funds can be used for the rest of the down payment. It’s also a good idea to talk to your lender to see if you qualify for down-payment assistance. Knowing what your options are and how much you will need to save before you start the process will help prevent any surprises along the way.

 

3. Get a cosigner

If your credit isn’t […]

17 10, 2014

4 Questions to Ask Yourself Before You Buy a Home

October 17th, 2014|Blog|

Home

 

Here are four questions to ask yourself before committing to a home purchase:

 

1. Can I afford my mortgage payments?

You should calculate your monthly mortgage payment costs to determine if it is a manageable amount under your current financial situation. You may want to consider an FHA mortgage or other government- backed financing option, if you can’t afford the mortgage payments with conventional financing.

 

2. Is my credit score good enough?

You should know where your credit score stands before you start looking for a home or begin the mortgage process. Even if you think you have perfect credit, there may be issues or mistakes on your credit report that you are not aware of. A mistake on your credit report can seriously cost you in the long run. If your credit is less than perfect, you can work to build up your credit and hold off on buying a home until your credit has improved, or you can apply for an FHA loan. FHA-insured loans are less risky for lenders, allowing them to offer more lenient qualification standards. Because FHA loan programs offer easier qualifying guidelines than many other loan types, they can be a good option for borrowers who have poor credit.

 

3. Do I have enough cash saved up?

In addition to a down payment, you will also have to pay closing costs to finalize your loan. This can be a substantial amount of money, so it’s important to plan ahead and be aware of the amount you will likely have to bring to the table. Make sure you have budgeted and saved up enough for these fees in advance, so they don’t catch you by surprise.

 

4. Am I prepared for unexpected home maintenance expenses?

Unlike renting, when you own a home, it’s your responsibility […]

10 10, 2014

Mortgage 101: Frequently Asked Questions about the Pre-Approval Process

October 10th, 2014|Blog, Buying a home, Mortgage 101|

Pre-Approval

 

What is mortgage pre-approval?

To be pre-approved for a mortgage means that a lender has looked at your credit and financial history and determined that you would be eligible for a mortgage. A pre-approval generally is a written statement from a lender stating that a borrower would qualify for a certain loan amount. Most pre-approval letters are good for 60 to 90 days.

 

How do I get pre-approved?

To get pre-approved, you will need to complete an official mortgage application and provide the lender with the necessary documentation to perform an analysis of your credit and take an in-depth look at your financial background. Some of these documents include:

 

  • Proof of employment
  • Proof of income
  • Tax documentation
  • Place of residence
  • Bank account statements
  • Credit information
  • Monthly expenses

 

Is pre-qualification enough?

Pre-qualification is different than pre-approval. A mortgage pre-qualification is an estimate of how much the lender thinks you could be eligible to borrow based on your basic financial information. So no, pre-qualification is not enough. Pre-qualification can help give you an idea of how much you might be able to borrow, but errors on your credit report and other issues can get in the way of that. The lender is only showing you the loan that they believe you could be approved for if everything checks out. Pre-approval is much more involved than pre-qualification and gives you a more solid figure.

 

Why should I get pre-approved?

Getting pre-approved for a specific loan amount will give you a more accurate idea of how much home you can afford. It can also make your offer more attractive to sellers because he or she will know you are only a few steps away from obtaining an actual mortgage. Pre-approval can also help speed up the underwriting and loan process, which will save you time once you have […]

3 10, 2014

How to Pick the Right Mortgage

October 3rd, 2014|Blog|

Mortgage

There are many mortgage options available to buyers, and it can be a challenge to figure out which one is right for you. Choosing the right mortgage option depends on your financial situation and your personal needs. Here are some tips to help you choose the right loan.

 

Determine your financial priorities:

A mortgage is a long-term commitment. Different loans have different terms and conditions, so choosing the right mortgage can have a big impact on your financial future. Here are some questions to ask yourself before you start looking for a loan:

 

    • How much can you afford for a down payment?
    • Do you want fixed monthly payments?
    • Will you need extra money for renovations?
    • How quickly do you want to pay off your loan?
    • Are there local down payment assistance programs?
    • Are you eligible to receive Veteran benefits?

 

Things to consider:

Consider your long-term goals when choosing a mortgage. Here are some additional things you should think about when choosing a loan:

 

    • Are there any fees associated with the loan?
    • What are the interest rates like for the different loan types?
    • Do you want the ability to make additional payments at no extra cost?
    • How long do you plan on staying in the home?

 

Research:

There are quite a few mortgages out there, and choosing the right one means doing your homework and researching the different options available to you. It’s important that you understand the differences between types of mortgages, so you should also talk with a reputable mortgage professional early on in the process. Here are a few tips to help you do your research:

 

    • Talk to family and friends
    • Contact a reputable mortgage professional so they can provide advice based on your current financial situation and long-term goals
    • Visit websites such as: U.S. Department of Housing and Urban Development, Federal Housing Administration, Fannie Mae, and […]
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