What you need when applying for a mortgage has changed significantly since the bubble burst. The loan process has become more challenging for buyers to obtain a mortgage.
Robert Fishel, a mortgage broker with Nations Reliable Lending, LLC provides the following generic list of items the bank may want from you:
Have the following information ready to go about the house you are buying:
- Type of home: Is it a single-family home, multi-family home, condominium, or manufactured home?
- Intended use for your new property: Is it a vacation home, primary residence or investment property?
- Construction type of new home: Is it a new build or an existing home?
- Size of the property
- Annual real estate taxes
- Homeowners association dues
- Estimated closing date
When applying for a mortgage, you’ll also need to gather personal information:
- Contact information
- Marital status
- Whether your spouse will be on the loan
- Length of time in current home, whether you own or rent
The mortgage process will require employment information that speaks to your job status and income:
- Place of employment
- Contact information for your supervisor or HR personnel
- Position or title you hold
- Length of time at current employer
- Annual salary, plus any overtime, bonus or commission pay
Indicate the type of loan you’re interested in, whether it’s an adjustable-rate mortgage, fixed-rate mortgage or jumbo mortgage. Your ability to be approved for a mortgage during the mortgage application process may hinge on which type of home loan you want. For example, the high-risk, high-value nature of jumbo loans will probably require a very strong credit score and large down payment.
The mortgage application will dive deeper into your income, as some borrowers will have sources of income other than their jobs. For example, know the total annual income you receive from such sources as:
- Your job
- Retirement or pension plans
- Child support and alimony
- Rental properties
- Interest from investments and dividends
In addition to income, it’s important for the lender to know where you’ll be getting the funds for the closing costs. You’ll also indicate if you already put down earnest money during the mortgage process; if so, that will be deducted from the closing costs. There are many ways you can pay the closing costs, but certain types of funds have caps, so it’s important that you draw from the appropriate sources:
- Bank accounts, such as personal checking, savings or money market accounts
- Sale of your current home or other real estate
- Gift from a relative
- Borrowed funds
- Other means
In your mortgage application, the lender will want to see some proof of your financial health, so you’ll have to provide information on money you have invested in stocks, bonds or retirement accounts. On the other hand, you’ll be asked for information on debts like car loans, personal loans and credit cards. Be prepared, if you currently own a home, to list its associated expenses:
- Mortgage payment
- Property taxes
- Homeowner’s insurance
- Homeowner’s association dues
You’ll also need to address any blemishes in your financial history, like bankruptcy, collections, foreclosures or delinquencies. Have dollar amounts and dates ready for submission as well as explanations of the circumstances. Your credit report will also be instrumental.
Updated Documentation –Robert Fishel goes on to say that if it takes longer than 30 days to close your loan, your lender will likely ask you to provide updated bank statements and paycheck stubs so that all documentation is up to date and current. Just before closing, the lender will update and review your credit to make sure no new accounts were opened or significant changes were made since application; the lender will also contact your employer to make sure your employment situation and compensation have not changed since the verification was complete.
Don’t wait until the last minute to apply for financing. It is now mandatory that seven days must lapse between the time of your loan application and the closing of the loan. This is not necessarily a problem for most transactions. Most loans take considerably longer to close, but it could be an issue if you are in a time crunch and waited too long to start the process. In addition, if there are changes to the terms of your home purchase and/or loan, the closing could be delayed by three days; the lender is required to update their disclosures and give the borrower a period of time to review these changes prior to closing.
Information provided by Robert Fishel
Vice President, Mortgage Lending
- Guaranteed Rate Affinity
(314) 649-1812 direct
(312) 776-2291 fax
- NMLS# 228636 | NRL NMLS# 181407
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