Before you start looking at homes the MOST important part of the process is knowing what you can afford and which loan program is best for you. We specialize in negotiating you the right deal on a home and stay out of the lending arena but work with several preferred lenders to help you get the process started.
Below are a few of the different loan types available and why it is so important that you speak with a lender and get pre-qualified.
Be Prepared and Gather Your Documents
You’re ready to apply for a mortgage. Get ready to gather a lot of paperwork. Lenders need to see a lot of documentation to evaluate your financial situation and make a final decision on whether or not to approve you for the loan.
Here’s what you may need to provide when you apply for a mortgage:
Proof of income:
If you’re employed, this means your W2s from the last two years. And if you’re self-employed or own a business, you need to submit tax returns for the last two years along with any other supporting documentation, like 1099s or P&L statements.
Some lenders may also want to see your tax returns (if you’re employed and only submitted W2s).
Proof of employment:
You may need to provide paystubs from your employer or other supporting documents, like letters verifying your employment status.
List of all your liabilities and debts:
This includes credit card statements, statements from other loans or lines of credit, and child support or alimony payments.
List of all your assets:
This includes things like retirement accounts, investment accounts, and bank accounts. You can also include proof of other assets that you fully own.
Explanations for large transactions or unusual situations:
Lenders will comb through everything in your financial life when you apply for a mortgage. Be prepared to provide proof or explain any transactions they question (like large cash deposits) or information they deem insufficient (like a gap in work and income history).
If you have these documents available and you completed the steps above, you’re ready! Approach your lender and apply for a mortgage with confidence. Good luck and happy home buying!