Getting a Loan to purchase a home can seem complex and difficult. Adding that there are a number of mortgage brokers looking for your business to take it instead of giving you advice on debt, it is important that you understand that you can quickly size up who you are considering to handle your loan application by being aware of the 6 things below.
1. Reserves – make sure savings and reserves are well seasoned. If you have cash you need to deposit, do that well ahead of time, months before you plan to buy a home. Have access to these banks statements.
2. Have the last 3 years tax returns available for you and if you are married for your spouse too.
3. Be ready to prove your income. W2’s, pay-stubs, 1099s, investments etc., the lender is going to make you prove your income there is no way around this.
4. Be honest about all your monthly expenses, if you understate your expenses, it will be picked up during the application process and your loan will be refused if your debt ratios are too high.
5. Do not make any large purchases or open any new lines of credit.
6. A pre approval is not worth the paper it is written on. Until a lender can get a look at your actual – provable income and expenses, a pre approval has not gone in-depth enough to give you the assurances to know if you can get a loan. Ask what it will take to get a DU approval.
If the lender you are working with is not asking these questions and not nagging you for documentation then consider looking for a new lender. You don’t need to in the middle on an escrow with money spent on inspections and appraisals only to find out you can’t get a loan because your lender did not to enough front end work.
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