Part of the American Dream for many families and couples centers around buying their first home and living in a neighborhood where their children can grow up making happy memories. The problem is that most people simply cannot afford to buy real estate in one massive lump cash payment. Only the most affluent of society can even consider such a transaction, and even many of the upper crust will avoid such a risky financial maneuver.
Luckily, the American banking system offers loans to families that work hard and want to buy a home, but simply don’t have all the funds on hand. And that is the essential purpose of the mortgage system, to make deals where everyone wins so that people can live their dreams and get that house they always wanted.
That means any potential applicant for a loan of this nature will need to make sure they have a stable future income and that they are legally protected and secure throughout the transaction process. In order for all parties involved to shake hands and call it a deal, there will be many issues to resolve first.
First and foremost, shop around! You can consult with mortgage professionals and learn all the ins and outs to the process, and by looking around and talking to several different ones you can see where things vary and deviate between them. After meeting and talking with a handful of professionals and you have chosen your favorite one, it’s time to sit down and do business on getting that mortgage on the home.
Make sure you bring your valid Photo ID, your Social Security number, enough money to cover the application fee that most lenders charge, and a diploma if you recently graduated. These basic forms of identification will be critical to you ever getting past the front door and they won’t process the application until after you’ve paid them for the processing fees. In addition to all of this, make sure you have written down your last residences and the names of landlords if any over the past several years.
Next you will need to verify your income for this professional to help gauge where your finances are going to be and to ensure you can safely make the payments without falling into a foreclosure and losing everything. If you want to do honest business and propel yourself into prosperity than you’ll realize there’s no room for deception and that telling everyone the truth is always in our best interests especially considering the long term financial situation.
You will need proof of your employment history, which includes names, addresses, phone numbers, and lengths of time at whichever specific company. If you have a new employer, just arrived to the area, etc, you may find it appropriate to bring information from your new employer or proof of various offers you are accepting.
Make sure to bring in copies of your pay stubs and your W-2 form. If you receive other forms of income, such as dividends, retirement, social security, or child support – bring these forms in too so that they can be verified. Any form of income such as rent payments others make to you should be included, so bring copies of the lease agreements as well.
If you are self-employed, no worries! Simply bring in your last few years’ worth of tax documents including schedules and a profit and loss statement for the last year bearing a valid signature. And if you’re retired make sure you still bring in the last few years of tax returns.
Next you will need to conduct an asset verification process. Take your time and make a list of all major assets you or your spouse own, and include their appraised market-book values. Bring in copies of your bank’s checking-savings account statements over the last half year and make sure you bring every page. If you have stocks, bonds, or retirement accounts make sure to bring in these certificates and all statements pertaining to them.
You’ve probably already taken out some loans in the past so make sure to bring in your credit card statements with balances and payment history, and make sure you cover every account. If you have installment loans on a car or student loans make sure to bring in all documents pertaining to those as well.
You will want to bring in proof of any properties you own, have bought or sold in the past few years as well. They will want to see the monthly payments and balance owed on any property you’ve had possession of in the last 2 years at least.
If you have to pay childcare expenses or other similar bills, or receive child support, they will need all of the basic information about that as well. Veterans need to bring in their form dd214 and certificate of eligibility. Retirees need to remember to bring in their retirement or social security award letters.
If you’ve ever had a bankruptcy in the past or have adverse credit, bring all documents pertaining to this including the discharge and schedule of creditors. For your poor credit history you will need letters of explanation to substantiate it. Also bring in all legal documents of any settlements or proceedings you are currently in relating to your property or financial situation, so all court related issues are important to remember.
This all might feel very invasive but it is necessary to ensure you and the lender can maintain a healthy relationship and to prevent you, or the lender, from losing on the deal you are about to shake hands on. Remember to be careful and make sure you’re talking to a licensed professional when you share this type of information. And make sure you tell your lender everything so that they can prevent a financial catastrophe and keep you moving upwards in society so you can continue to buy or sell houses.
Information Purposes Only. Always consult with a licensed mortgage professional before moving forward with any real estate transactions.