Mortgage Application Tips #5: Required Information

We briefly mentioned some of the things that you may need to bring with you before you start your application, but here is a more detailed list of the information mortgage lenders will use to consider your loan application.

For all loans:

• Social Security Number, for borrower and co-borrower if any
• Employment History for the last two years, employment dates, addresses, salary.
• Current pay stubs or W-2 forms.
• Check and Savings Accounts and Certificates of Deposit. Location of bank accounts, account numbers and balances, address of bank if out of town, last 3 months' statements.
• Stocks, Bonds, and Investment Accounts.  Broker's name and address, description of stocks, bonds, etc.  Last 3 months' statements or copies of stock certificates.
• Life Insurance Policies. Insurance company, policy number, face amount, cash value, if any.
• Retirement Plan. Approximate vested interest value. Copy of latest statement.
• Automobiles.  Make and model of automobiles, their resale value.
• Other Assets.  Market value of personal and household property
• Liabilities and Other Non-Mortgage Debt. Creditors names, addresses, account numbers, monthly payments and balances, other income information you may need.

If you're self-employed you'll need two years tax returns, profit and loss statements, both company and personal if separate. Current balance sheet and profit and loss statement if more than two months into the new fiscal year, signed by CPA.

If you have income from any of the following, you'll need two years' personal federal tax returns:

• Commission
• Overtime
• Bonus
• Partnership
• Rental Property
• Trust
• Notes Receivable
• Interest/Dividends

If employed in family business, you'll need personal federal income tax returns and all schedules for the past two years.

If divorced or separated:

• Complete executed divorce decree and settlement agreement
• Payment history of alimony/child support over the past 12 months, if it is a financial obligation.
• If you choose to have this be considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits.

If you own real estate you'll need the name and address of all mortgage lenders for the past 24 months, account numbers, monthly payments and balances

If you've sold your home but not closed you'll need a copy of the sales contract.

If you've sold your home, closed, and you will use the proceeds for your new down payment you'll need a copy of the HUD-1 Uniform Settlement Statement.

If you rent you'll need the name, address and phone number of landlords for the past 24 months.

If you're buying a home you'll need purchase sales contract or offer to purchase and all addenda. Furnish contract with original signatures of buyer and seller.

If a source of your down payment is a gift, you'll need  the name, address and relationship of donor. Gift funds will be verified in both the donor and recipient's accounts. Note: Not all loan programs allow gifts to be part of your down payment.

For FHA Financing, you'll need evidence of Social Security Number and photo identification.

For VA Financing, you'll need your DD214 and Certificate of Eligibility.

For Construction/Perm Loan, you'll need signed construction with cost breakdown, builder plan and specifications.

If you have any questions at all about the above information, we would love to help you! Call us at 877-828-8851 and we can get you on that path to homeownership! Remember, this is what we do everyday. While this process may seem a bit daunting to a first time buyer, we want you to know that we have your back. We will get you through this as quickly and easily as possible!

Read More

Mortgage Application Tips #4 - Credit Scores

Before they decide on the terms of your loan, lenders want to know two things about you: your ability to repay the loan, and if you will pay it back. To assess whether you can pay back the loan, they look at your income to debt ratio which we talked about last week. In order to assess your willingness to pay back the loan, they look at your credit score.

To learn how to improve your credit score, view this article.

The most widely used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. The FICO score ranges from 350 (high risk) to 850 (low risk).

Your credit score comes from your history of repayment. They never take into account your income, savings, amount of down payment, or demographic factors like gender, ethnicity, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider solely what was relevant to a borrower's likelihood to repay the lender.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score results from both positive and negative items in your credit report. Late payments lower your score, but consistently making future payments on time will improve your score.

For the agencies to calculate a credit score, you must have an active credit account with a payment history of at least six months. This payment history ensures that there is sufficient information in your credit to assign an accurate score. Should you not meet the criteria for getting a credit score, you may need to establish your credit history before you apply for a mortgage.

For assistance on applying for your mortgage, give us a call. 887-828-8851.

Read More