Below is an excerpt from an article provided to CharlestonNewHomesGuide.com
by Bill Byrd of Keller Williams – Byrd Property Group located in Charleston SC. If you intend to apply for a mortgage to buy a new home in Charleston it is important to know what to bring to a loan application.
One of the goals of any bank or mortgage underwriter is to assess your risk profile. Your mortgage loan officer will compile your financial information just like an attorney would in preparing 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, the loan officer wants 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.
The Top Requested list below is intended to help homebuyers make the most of their face-to-face time with the lender. This way, you can focus on the home not the financing.
Photo ID
A driver’s license or passport should suffice.
Credit History
Lenders will pull your credit report however if you know there is anything on yours that is questionable, be prepared to explain any blemish in detail in writing.
Tax Returns
Most recent two years of tax returns
W-2’s, 1099’s, Pay Stubs
Bring your most recent pay stubs and W-2. If you’re up for any pay increases soon, this is where you should let them know. If self-employed provide your 1099’s to support your income.
Bank Statements and Other Assets
In assessing your risk profile, the lender will look at bank statements and other documented assets included in this group could be investment portfolio statements, Life Insurance Policies etc. Underwriters are looking to see you have financial reserves in the case of an emergency and that you will still be able to make your mortgage payments. They will also want to see your down payment has been in your bank account for several months thus creating an account of your financial stability.
Gift Letters
There are times, homebuyers receive assistance from a family member or a friend. In such cases the lender will require a “Gift Letter” acknowledging the giver and that the money is a gift, and no repayment is required. Many lenders have either a form for this or will simply give you an example letter to follow.
Rental History
If this is your first mortgage, your rental history will be the proof you pay your bills on time. Typically, a year’s worth of canceled rent checks will be requested. Rental history is very important if a borrower doesn’t have a long credit history.
Questions for you to ask your lender (Most people never do but should!)
- 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
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.
Helpful resource:
Basic Fannie Mae Homebuyer Lending Requirements.
This helpful and informative post outlining “What to Bring to a Loan Application” has been provided to CharlestonNewHomesGuide.com by Bill Byrd of Keller Williams – Byrd Property Group located in Charleston SC. As a real estate professional for 35+ years, Bill has assisted many a homebuyer with this important process. Note this post is an excerpt from Bill’s original article posted on Byrd Property Group’s blog. More About Bill
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