What to expect when applying for a mortgage?

Buying a home is an exciting time. Applying for a mortgage might be stressful with all the regulations and requirements. The basic mortgage application is divided into three requirements: Credit report, Down payment/Asset and Income.

Here what lenders look for in each section?

Credit report: Score, Length of credit, type of credit extended, judgments, monthly obligation and name/addresses discrepancies.

Down Payment: usually, bank statements, down payment needs to be in the bank account minimum of two months. All large despots need to be explained and sourced. Any Assets such as real estate properties owned needs to be explained.

Income: two years of income to show stability. W-2 and Tax returned along with pay stubs are required to show income trend. Job changes, income interruption needs to be explained. All jobs current and prior for the past two years need to be verified

Lenders will pull a new credit report prior to closing to make sure no new credit has been extended. Lenders will ask for the latest pay stubs and bank statements prior to closing.

Items Required (for most loans);

Pay stubs for last 30 days.
W-2s and 1099s for last two years
Last two years’ tax returns (If you are self-employed)
Last two months’ bank statements
Most recent investment account statements
Copy of Driver License and Social Security Card

Total payment

Your total monthly payment includes the following:

Principal and interest depends on Loan amount, Interest Rate, and Length of the loan.
Property Taxes. Depends on the county the property located in
Hazardous Insuranc:
Mortgage Insurance if your down payment I less than 20%, Mortgage insurance is required on most loans.
Monthly HOA: Depends on the community the property is located in.

Pre-qualification:

We do not pre-qualify you based on the loan amount. We qualify the borrower based on total payment.

The total payment allowed is a percentage of total income.

Since the total payment allowed has 5 Parts (Above), an increase in one item will reduce the qualified loan amount.

Before you apply for a mortgage

You need to get all your documentation in order.

Your credit score is the most important factor in determining your interest rate and the amount of mortgage insurance you pay (in case you have less than 20% down payment).

in some cases you might need to work on your credit score. (go here)

What to expect when applying for a mortgage?

Items Required (for most loans);

Before you apply for a mortgage

What is the preaproval?

What is underwriting?

what is the appraisal?