I've been in mortgage banking for more than twelve years. My business grew the old fashioned way; lunch dates, eye contact and conversation. I don’t want to be a blogger, I want to have real conversations and be a resource for practical information.
In my profession, trust matters. Sitting down with a mortgage professional means sharing your spending habits, revisiting old mistakes you've made and making tough decisions about your budget.
Here is what I recommend you pay attention to and prepare for:
- You have to present two tax returns & W2s/1099s.
- If you owe the IRS money and are on a payment plan for less than 6 months, be prepared to pay off the balance before you can close on the loan.
- 30 days worth of pay stubs will be required.
- All pages of your bank statements, nothing marked and two consecutive month’s worth. Be prepared to explain deposits made into your account that are not wired from the IRS or standard direct-deposits from your employer. As a general rule, deposits that are 25% or more of your gross income must come with a paper-trail.
- Don’t deposit cash, this will create challenges that sometimes cannot be resolved.
- Your most recent two year history of residency and employment will be documented and verified, in most cases you will have to explain all of the addresses that show up on your credit report.
- If you have had a bankruptcy within the last 7 years, have your BK papers handy, most of the time the underwriters will request them.
- If you have foreclosed on a property within the last 7 years, prepare a short letter of explanation and include the property address that was foreclosed. The letter should briefly describe the hardship and how it has been resolved since.
- Underwriter’s are looking at your financial life story on a computer screen, in cases where there has been hardship, frequent job changes or income fluctuations a short cover letter is a great way to tie in your story. The personal touch will go a long way.
- Be prepared to answer questions. Finding the perfect home is as simple as falling in love with a picture online, visiting a property and getting your offer approved. The loan on the other hand takes much more work. The more you do up front with your mortgage banker, the more peace of mind you will have.
The loan approval is the first step you should take when preparing for a home purchase. No realtor will offer on a home without it. When you get this step out of the way, you will have all the free time to plan for new appliances, fancy decor and making fabulous memories in your new home.
My purpose is service.