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Get Ready, Set, Go!

Posted by:  Chip Poli
2013-01-07 10:46:29

If you’re thinking of buying your first home or are contemplating a move up or even a downsize, you can bet that there’s going to be a tad more paperwork required for a mortgage these days. Gone are the “low document” or “no document” loans where little, if anything was verified.

Those loans are gone along with the lenders that invented them. Now we’re back to the traditional method of mortgage approval: review and verify. But there are certain things you can do now to help streamline your approval process.

[note color="#f5ef89"]Resource: Guide to Credit and Getting a Mortgage[/note]

getting a mortgageFirst, talk to a loan officer and get an idea on how much you can qualify for. If this is your first home or your last you want to get an idea on how big or small of a mortgage best suits you, especially given today’s low rates. You’ll also want to get a good grip on how much money you’ll need for a down payment and any closing costs associated with getting a mortgage.

Get a copy of your credit report. There are a variety of businesses in the marketplace today that will help monitor your credit for you and provide a copy of your credit report and while that’s certainly not a bad idea; you have to pay for that service. Instead, visit Poli Mortgage and get a free credit report from all three credit repositories.

The three main credit agencies, Equifax, Experian and TransUnion sponsor this free site and allow consumers to pull their credit report once per year. Review the report and make sure there aren’t any errors such as someone else’s credit showing up on your report or payments mistakenly reported as being late.

If you do find mistakes, you should let your loan officer know about them. Lenders have business relationships with credit agencies and many times can help you take care of mistakes with just a phone call. Just be prepared to provide evidence that the error is in fact real.

Your lender will also want to look at your previous two year’s tax returns as well as your year-to-date paycheck stubs showing both current and year to date earnings. The lender will use your gross monthly income when approving you. If there has been a gap in employment for any reason the year-to-date earnings won’t match up with your current income. Be prepared to explain and document any employment gaps.

You’ll also need to gather your three most recent bank and investment statements from the accounts you’ll be accessing to raise cash to close on your home. Make sure you provide all pages of the statements, even if a page is blank. It may not make any sense why a lender wants to review a blank page but the lender doesn’t know if the page is blank or not without seeing it.

looking for a mortgage

A lender will want to see regular deposits of similar amounts in your accounts. Most often these deposits will match up to your paycheck. If you get paid $2,000 on the 15th and the 30th you can bet your lender will want to see those amounts deposited in your account on or around those dates.

If you take care of these items before you apply for a mortgage loan your application will be processed and approved with ease. Just provide the documentation when asked and be prepared to document any explanations you may have regarding credit or income or any other matter that may arise. When you do, you’ll have a stress-free closing. Ready? Set? GO!

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