Getting Ready
 

 

           

Steps and suggestions for establishing a mortgage for your home loan:

Before You begin looking for a home:
Establish a relationship with a Mortgage Lender you feel comfortable with and can trust. Establish a base line mortgage that your income substantiates. This gives you the Price range of a home you can begin shopping for.

Qualifying for a loan

  1. Loan Verification - Typical information required to establish a Mortgage

    Home appraisal
    Personal credit report
    Personal Income verification by employer
    Current home Mortgage - or - landlords letter
    Unusual Monetary gifts typically require a gift letter of explanation.
    Verification of Current obligations, Credit Cards, Car Loans, child care provider

  2. Title company compiles all the above information along with verification to lenders, verification to bank, and the title work papers.
  3. Information is sent to the Underwriter of your mortgage company.
  4. Loan level is determined on the fact of these documents; Income Verification, Credit History, Asset Verification, Home Appraisal.

Unusual Considerations:
Some loans may require verification of unusual situations. Employment, delinquent payments, etc. You may be asked to write a letter of explanation to the loan officer to explain unusual situations.

Typical list of Loan Application Items you will need:
2 years of W-2's
Last four pay stubs (pay stubs covering a four week period)
Most recent three months bank statements
Loan information (including mortgages) lenders name, address & account #
Charge cards account #'s & minimum payment balances
Landlord name, address & phone for the last two years
Drivers License and Social Security Card
Check for appraisal and credit report

Veterans: DD214 and Certificate of Eligibility

If commissioned, self employed or owning rental property 2 years personal and corporate federal tax returns, year-to-date profit & loss and balance sheet Court Decrees bankruptcy, divorce and judgment satisfactions

Types of Mortgages

  1. FHA loan is a loan that is insured by the Federal Housing Administration.
  2. VA loan is a loan made available for veterans and guaranteed by the Veterans Administration.
  3. FHA loans require borrowers to pay MIP (mortgage insurance premiums, paid monthly), to insure the loan. VA loans require the borrower to pay a one time VA funding fee.
  4. Conventional loan is a loan no greater than $207,000 ("Jumbo") which is neither insured by the FHA nor guaranteed by the VA.

Considerations: Fixed Rate or Adjustable Rate mortgage
This is based on your temperament to the market - Can you take rate increases? Also where the market currently is and a reasonable forecast of where it is going.
An Adjustable Rate Mortgage (ARM) VS Conventional
Your personal Temperament and situation must be evaluated. Ask yourself the following questions:
What is my Household / Personal Budget
What is my current financial situation: income, debts, other expenses:
Remember to factor in the cost of your new house.

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