Home Loan Qualification
In order to make an offer on a property, you will need to prove you’ve been pre-approved for a mortgage to cover the offered price. Here are a few tips to make that process easier:
- Meet with a mortgage specialist before you even start looking at houses. You’ll discuss your income and loan options, and the specialist will be able to point out any potential snags. You don’t have to pull a credit report or offer any hard numbers – but you’ll get a good idea of your budget (this is sometimes called pre-qualification).
- Although bad credit isn’t a complete deal-breaker, it’s important to have your debt and credit in the best shape possible. Pay down any debt, refinance high-interest loans, and pay all bills on time. Don’t apply for any new loans or credit during this process. Your lender will check your credit at the start of the approval process, but also right before closing, so make sure nothing changes. Credit scores of 720 or higher will get the best interest rates.
- Collect all of your documents – your lender will want to see your tax returns for the last two years, as well as bank statements, paystubs, and credit card and loan statements. If this is your first time buying a house, they might want contact information for your previous landlords. Lenders will also want to see that you have some savings in reserve, after your down payment.
- If you’re self-employed, you might have more hoops to jump through. You’ll need to have run your own business for at least two years. Since you likely write off a lot of deductions at tax time, lowering your reported income below the actual amount, you might only be qualified based on that reported income.
- Work with your realtor and lender to develop a budget, including down payment, earnest money, closing costs, and any other charges, so you’ll have a clear understanding of how much money you need.
Your lender will compile all of your information, run a credit check, and assess your finances. Once you are pre-approved, the lender will determine which loans you can qualify for, how much you can borrow, and what your interest rate will be. Now you can make that offer!
Carolina Garcia Real Estate Group is happy to recommend JT Fore with NRL Mortgage as our preferred lender.