Time to buy your first property?
It’s a wonderful moment in one’s life when the decision is made to invest in real estate. It can be exciting and nerve-wracking at the same time.
Before heading towards a Realtor in the hopes of finding good properties, you have to assess the financial side of things.
What is your budget? Have you received a pre-approved mortgage? How will you acquire the necessary funds to get that dream home?
This is why the most important article you’re going to read on real estate will involve this part of the process. A part that has to be done right or you’re not buying anything.
Unless you have money to spend and don’t care for loans you will need to know more about this process.
Let’s see what you need to take with you to an appointment. This information is gold for those who have never done this before.
Photo ID (Multiple)
Well, this is common sense. You will have to showcase ID to verify who you are and where you reside currently. All ID you will be providing to the lender has to be updated and accurate. If not, you will be declined as they do check for this information and are serious about it.
If you wish to test your luck, please do go to a lender with the wrong ID. They will turn you away immediately.
The ID has to have a photo as they will be looking to match it with the person who is there in front of them (which would be you).
This is a given as you will be asking for a loan. You need to have your latest bank documents (all of them) as this will help determine how much you have in your possession and how liquid these assets are.
How many months should you be providing them with in terms of the statements? The safe bet is to go for the previous two-three months of statements. If you don’t want to head back home, just bring the previous four statements and you will be fine. There aren’t too many lenders who ask for more than that.
Your tax information and papers will be required for the home loan as well. You will be asked to provide the previous two years as that will be enough for them to assess what you are claiming in terms of your income.
They will also know how much you are receiving in tax returns.
If you are applying during “tax season”, you will not be asked to provide immediate papers as that is unfair. They will ask for last year’s and that will be enough.
You will be asked to verify your income as that is a big part of what the are basing your viability on. They will wish to see how you are bringing in money to pay for the mortgage.
These forms are given by the employer (if you are employed) and have to be filed with your taxes.
For those who are receiving 1099s, please give those to the lender as that will suffice in your case.
Have you made any deposits in the account? You might be asked to bring documentation for that as well to verify where the funds have come from, This is certainly the case for large amounts.
Do you have a mortgage already in place? This has to be brought along with you for them to assess how much is still due and how your payments are looking. This is mandatory and they will go through the system to figure out whether you already have a mortgage under your legal name.
You have to provide payment proof over the previous two years when it comes to the mortgage statements.
If there are funds you are receiving from a third party for personal reasons (i.e. family), you will have to provide an explanation for this. It will be filed under your name and taken into account when they are going through your mortgage. It is best to look at what you are getting when hoping to gain approval.
There are some who don’t bring this letter and are turned away after the accounts are checked.
These are all of the documents you will have to bring along with you to the lender when you are hoping to get pre-approved for the home loan. Do not panic when you are going in for the first time as it is supposed to be a cordial meeting and one that should be enough to get you approved.
Be confident and you will be fine.