It’s important to know what to bring to a loan application. The list below is to help all homebuyers make the most of their face to face time with the lender. So when your buying a home in Charleston you can focus on the home not the financing.
Top Requests-What To Bring To A Loan Application
Photo ID
This should be obvious. Your lender and the government want to know that you are who you say you are! A drivers license or passport should suffice.
Credit History
In this day and age, most people should expect that the lender will pull their credit report. Interestingly, most people have a pretty good idea of what’s on their credit report. If you know there is anything on yours that is questionable, be prepared to explain any blemish in detail in writing. Again, this is to establish whether or not lending to you is a good risk!
Tax Returns
Most Banks and Mortgage Lenders will want you to bring to a loan application your most recent two years’ of tax returns. What the returns show them is your consistency in reported earnings. This is the beginning of putting together a complete representation of your current financial situation. Additionally, you may be asked to sign a Form 4506-T. IRS Form 4506-T allows your prospective mortgage lender to request a copy of your tax returns directly from the IRS.
W-2’s, 1099’s, Pay Stubs
Your mortgage lender will also ask you to bring to a loan application your most recent pay stubs. Your pay stubs will confirm what your current earning are. If your up for any pay increases in the near future, this is where you should let them know. During your pre-approval process the lender will attempt to find the balance your income and your liabilities. This is how they determine what they will be willing to lend you. Once they discover where your balance (ratio: debt to income) is, looking at your tax returns will give them a clear picture of your long term financial strength. Self employed folks should provide their 1099’s to support their income.
What To Bring To A Loan Application
Bank Statements And Other Assets
One of the goals of any bank or mortgage underwriter is to assess your risk profile. They do this by taking a look at bank statements and other documented assets. Included in the group could be investment portfolio statements, Life Insurance Policies etc. What they are looking for is to see that you have financial reserves. They want to know that in the case of an emergency, you will still be able to make your mortgage payments. Additionally, they will want to see that your downpayment has been in your bank account for several months. This is all designed to create the picture of your financial stability.
Gift Letters
Many times homebuyers receive assistance for a family member of a friend. If this is the case, the lender will require you to produce a “Gift Letter”. This is an acknowledgement of the giver, that the money is intended to be a gift and no repayment is required. Many lenders have either a form for this or will simply give you and example letter to follow.
Rental History
If you don’t already have a mortgage, your rental history is the proof that you pay your bills on time. Some loans and lenders may have slightly different requirements for this. Typically a lender could ask for up to a year’s worth of canceled rent checks. A new borrowers rental history is very important if a borrower doesn’t have a long credit history.
What To Bring To A Loan Application
Why is this important?
Your mortgage loan officer compiles your financial information just like an attorney would prepare for a case. Their job is to prepare your file based on a fixed set of guidelines to present to the underwriters who approve or deny your loan. Keep in mind, they want to make the loan to you. That’s how they get paid. If they ask you for additional documentation, there is a reason for it. And, you can be sure it’s to make your “case” better looking for the underwriter who ultimately makes the decision to finance you or not.
Some Really Great Questions To Ask Your Lender
But most people never do!
- Do I qualify for any other mortgage options?
- Why is this the best mortgage type for me?
- Do you see anything that I could improve on my credit report that will help me to qualify for a better loan?
- Are you quoting me a rate with mortgage points being charged?
- Does buying points to reduce my rate make sense in my scenario?
If your lender can’t answer these questions with non-biased answers, you should speak with another lender.
If your lender gets upset by these questions being asked and says something like “I’m the expert, let me worry about the loan type.”, find another lender.
Conclusion – What To Bring To A Loan Application
Who you hire for your mortgage is important and not a decision to be taken lightly. Make sure your lender has been vetted by either your real estate agent or someone you completely trust. In the mortgage industry we have found that their are a lot of great salespeople out there, but the pro’s who deliver great results day in and day out are few and far between. Let us know if we can introduce you to one of our best in the business professionals?
Basic Fannie Mae Homebuyer Lending Requirements.
“Did you know you some lenders have the ability to qualify you without a hard pull on your credit report? While the hard pull credit inquiry is required for full loan approval, a soft pull process lets you research your options earlier in your homebuying journey without affecting your credit.”
The Author…
Bill Byrd is a Husband, Father, Realtor, Educator, Musician and Athlete. A licensed Realtor since 1986 who loves helping his clients grow their personal wealth through real estate! Having helped hundred’s of families and individuals during his career you can feel comfortable that Bill’s and his Team’s experience and expertise are unparalleled in our market. Plus, Bill’s a great guy and one heck of a guitar player! More About Bill
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