Prior to beginning your home search, the first step is to speak with a lender and establish a budget. This is the process of prequalifying for a loan. Once you find the ideal residence, your lender will order an appraisal and finalize the financing. Understanding how to prepare for the qualifying process is the first step to success, whether this is your first home
purchase or it has been a while since your last.
What qualifications do I need to obtain a mortgage?
As you prepare for your meeting with the lender, gather and bring with you all relevant documentation. The lender will require two months' worth of pay stubs, bank statements, and the previous two years' worth of tax returns. After examining your income and savings, the lender will also order a credit report that details your reoccurring debt and payment history. This will be used to determine whether or not you can afford the proposed mortgage.
How will my ability to obtain a loan be affected by my credit score, down payment, and income?
There are numerous available loan programs. From VA loans with no down payment to conventional loans with a 20 percent down payment, your lender will review all of your options with you to determine the optimal program. Some government-backed loan programs, such as the VA and FHA, have more of a lenient credit score and other eligibility requirements, such as savings and income ratios.
The process of qualifying for a mortgage may appear daunting, but your lender will walk you through the steps and requirements. You can make the best financial decision for your new home loan after learning your options.
If you are looking for a home and need to contact a realtor, connect with Madriz Realty Group today!