I just got off the phone with a friend who's ready to start shopping for a new home and I thought I'd do a brief recap of the recommendations that I provided him. I blogged previously about getting yourself prepared for a refinance, and this post will run along the same lines. Doing your due-diligence goes quite a long way with regards to financial situations like this. When you initially speak to a loan officer, they will "pre-qualify" your situation. What they're basically doing is considering your stated income and debt levels and possibly doing a credit check to estimate what dollar amount you would be qualified to borrow. It's a "in theory" type of situation. In theory, if your income and the rest is what you're saying it is, here's the $amount you're qualified t
o borrow. When you're ready to actually move forward and make an offer on a home, you'll need to get pre-approved. This is when the loan officer will request items that will verify your financial situation and calculate your exact debt ratios and the result is that you're basically approved on the broker's side for the loan (pending underwriting by the lender).
Most people in the home buying process took some time with a professional and have narrowed their purchase range to a certain $ amount and have shopped around a bit. Whether you're ready to move on a home or not, you're still going to need to dig some items up, so here's a quick list.
- Most recent paystubs for the past 1 month. (The person processing your loan will need to make sure that your gross income figure is correct so they'll need a full 30 days of income proof. Most larger companies provide an online system that you can simply export a screen capture or email a pdf of your previous stubs. Brokers do not need the original copies, but if provided, we'll make copies for your file.
- W2's for the last two years. (People do move jobs quite a bit, and pay rates fluctuate depending on what type of profession you're in; these w2's will help us calculate any additional non-salaried pay, bonuses, etc. into your income calculation.)
- Signed copies of your tax returns for the last two years (Lenders are getting stricter with their underwriting process. These tax returns aren't always required but as the industry continues to tighten their restrictions, you may want to dig them up just in case. The tax returns you provide will help to not only verify your income, but your overall expenses and deductions helping the underwriter to gain a more complete picture of your financial profile. Tax returns are absolutely necessary for those who are self employed or independent contractors.
- Bank statements for the last 60 days. (This helps to verify your cash flow and your assets on hand. These are only useful when printed out right before you're about to submit the remainder of the paperwork to the lender/broker.)
- Any retirement or investment account statements.(Same as above)
The best advice that I can give
is that if you're unsure of how your unique situation may affecta purchase or refinance, dig up these documents, and go see your mortgage professional. A little face time and number crunching can save you a lot of trouble. I'll continue with some additional info related to this post with regards to the costs that you can expect to see for closing a purchase.
Today's market was mixed. Stocks recovered a bit from yesterday's slide. Rates are holding
steady right around 4.9% -
DNJ Mortgage
1350 Sunday Drive.
Raleigh, NC 27607
919.459.6533
integritylender.com
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