August 17th, 2009 5:21 PM by Korene L Clopine-Seaman
Home ownership is a dream shared by millions of people around the world. Knowing what you can afford will make buying a home easier, but how do you know what you can afford? These tips will give you an idea of what to know about pre-qualifying for a loan before you start looking for a new home.
One of the biggest reasons why you’d want to pre-qualify for a loan is that you’ll have an idea of what price range house to look at. If you know you only pre-qualify for $100,000, you won’t be tempted to get your heart set on a house in a higher price range. It will also keep you from embarrassing yourself by not offering enough for a house.
Another benefit of pre-qualifying is that it can make receiving a mortgage quicker. You’ll already have established a relationship with the lender, so you know you can work with them which could make the process less nerve-wracking.
The following list shows the items you’ll need to provide to a lender for them to make a pre-qualification determination:
Income: W-2 tax forms for each wage earner for the past two years
Employment: Names, addresses, and phone numbers for each wage earner for the past two-three years
Creditors: List of all creditors owed money including the total amount owed as well as monthly payment and account numbers
Residence: Addresses of the last two places you lived. Provide the landlord’s name, address, and telephone number if you were renting. If you had previously owned a home, provide the name, address, and telephone number of the mortgage holder
Banking: Bank statements for the last three months
Pay stubs: Pay check stubs from the past month
Tax forms: If you’re self-employed, you’ll be expected to provide complete tax forms for the past two years
Gift letter: If you’ll receive gift money to help you buy the home, you must have a signed letter declaring the money as a gift
Divorce decree: If you’ve been recently divorced, you will be expected to provide a copy of the divorce decree as well as proof of any child support or alimony you’ll receive
Supporting documents: If you have other income such as social security, stock dividend interest, or something else, you’ll want to have that information available
Sales contract: Provide a copy of the purchase/sales contract if you have already found the house you’d like to purchase
The Loan Officer, once they have the above information will also ask if you have a down payment . There are many programs still available with downpayments of less than 3 % and Veterans may obtain loans with no money down within certain limits.They may also expect you to give them permission to run a credit check on you and anyone else that will be responsible for paying the loan. You may also be expected to supply 2 to 5 percent of the loan amount for closing costs.
When you’re searching for a home, knowing what you can afford to spend will actually help you find the perfect home for you. Having the knowledge of what to know about pre-qualifying for a loan will make the process much easier.
For Contact information
Korene Clopine-Seaman, CMPS, CMA, RRDS, LMB
Email: korene@klcsloantream.com
or you can apply directly for a loan on my website at www.klcsloanteam.com/myloanapplication
Or you can call 623-340-0934