Prepare Ahead- Find Financials
Every lender requires personal documents to process and approve a home loan mortgage. The credit report provides some account names and account numbers, but this will give you the list to work on what is not easy to get. Know that you’ll also need to provide more pay stubs and bank/broker statements as you get them during this process. Another credit check and employment verification are done the final day before closing the loan. Try very hard to not change a thing once you are approved.
What Your Lender Needs
- 2 years of tax returns for every person on the loan. These need to be for last year and the year before
- Year-to-date P & L if you are self-employed
- Business tax returns if applicable
- A month of paycheck stubs or check copies for each person signing the loan
- Two months of bank or credit union statements for both checking and savings accounts
- Lender, loan number, and amount owed on installment loans- student loans, cars, etc.
- Addresses where you’ve lived for the last five years
- Brokerage account statements- last two statements
- List of assets- stocks, bonds, boats, homes, and cars where no debt is involved
- Your most recent 401(k) or other retirement account statement
- Documentation to verify additional income, such as Social Security, child support- paying/receiving or pension and existing Home Loan Documents
Lender Products and Approvals
There are many kinds of home loan products. Stated Income Home Loans have gone away, but there are home loans where you can show bank deposits to verify income and other creative programs.
A gazillion online lenders have come to the web in the last 10 years. Choosing an online lender is a choice you’ll have to make if it’s the best decision for you. Know that a lot of things can go wrong with a loan at the last minute so we suggest that you use a reputable company whether you choose a brick and mortar or online company. Shop rates and time frames. Ask your lender about guarantees. If you are told that you qualify and at the last minute you don’t, your earnest money is at risk. If you close late, you are in breach of contract and the seller can back out or fight you for money. Our job in our eyes is to protect you and your earnest money so know that no matter who you choose we will follow up once or twice a week to make sure your lender is on track.
Ideally, having a “Fully Approved Loan Qualification Letter” has a lot more weight than a “Pre-Qualification” letter. A Loan Approval requires the above paperwork submitted to underwriting so be prepared. When there are multiple offers on a house, cash is king, fully approved loan is the second best and pre-qualified buyer is third. If you have time, do your loan app before looking at houses.
Shop Lenders, Rates and Fees
Anything out of the mainstream box will usually result in a higher interest rate. If you need a referral to our favorite local lender, a person in a building that answers his phone, Bruce Singer is the guy. He also has been in this business for 25 years and a lender really has to impress us to keep our business. Include him in your lender interviews and rate comparisons. See our other loan and credit blogs for information about shopping lenders, loans and rates.
This Blog was written by Kurt Grosse. Kurt is a 24+ year Southern Nevada Realtor, X-Engineer and Full-Time Protector. Give him a call today at 702-750-7599 for a consultation and to find the home that’s right for you.
Related Blogs: FICO Scores and Credit Basics or Improving Your Credit Score and Home Loan Qualifying- Plan It.