Steps in obtaining financing to purchase real estate and receive a letter of approval:
1. Completed signed Loan Application and disclosures
•a. Name of all borrowers,
•b. Address of Subject property, loan amount
•c. Birth date, years of schooling, number of dependents per borrower
•d. last two years resident address
•e. Employer info for the past two years and how long in this line of work
•f. Gross monthly income per borrower
•g. Child Support received (if applicable)
•h. Any other income received monthly
•i. Bank information on all accounts, checking/savings
•j. Stocks/bonds/401/Annuities/Whole Life Insurance and values
•k. Current rent/mortgage payment
•l. Complete list of Real estate holdings/ current mortgage amount/current rent (if Applicable)
•m. Declarations
•n. Disclosures
•o. Signed and dated
2. Credit report will be pulled. If there are any disputes on the report you will need to send a separate letter to each bureau disputing that line item. One letter per line item. The best way is to make copies of your report and assign a color to each bureau and high light each report for assigned bureau.
Example: TransUnion reporting a dispute high light that dispute in yellow and send in a letter disputing this line item; Equifax highlight green and Experian in orange. You will want to make separate copies for each individual line item in dispute to assure that it is reviewed.
a. An account, in writing, of any problems concerning the application, such as late payments to a credit card company or lapses in employment.
3. If a non-resident Alien copy of front and back of card of permanent resident alien card
4. Last two most recent paystubs for all borrowers
5. Last two most recent bank statements for all accounts. If this is printed off the internet it has to be taken into your bank to be signed, stamped and dated on each page.
6. Most recent statements of vested interest in retirement fund. Copies of your stocks and bonds. If they are in the hands of your broker, provide the name and address of your broker, plus your account number(s).
7. Most recent statement for Whole Life insurance net cash value and the face amount.
8. If other real estate is owned need copies of lease agreements and rent rolls.
9. Complete last two years personal tax returns, W2's and/or 1009's and business tax returns (if applicable)
10. If you were a full-time student at any time during the past two years, be prepared to verify this.
11. If divorced a copy of the divorce decree, showing the amount of support payments per month and copies of cancelled checks for the last 6 months.
12. If filed bankruptcy in the past 7 years copies f petition and discharge
13. A complete schedule of your real estate holdings. Include the address of each property, the type of property and number of rental units if rented, the income from each property, the mortgage payments, the taxes and insurance and any income (or loss) from operating the property (If applicable)
14. Purchase and Sales Agreement executed by all parties along with a copy of the MLS Listing
15. A copy of your cancelled earnest money check16. Name and telephone number of the real estate sales agent involved in the transactions.17. Your own attorney's name and telephone number (if applicable)
16. Condominium/Townhome or Association; buyers should try to obtain a copy of the condominium documents; if the project is FNAM 1028. These will circumvent the need for providing the condominium documents to the lender.
17. An estimate of the annual property taxes and a reliable quote for insurance and before close one year Homeowners Insurance paid in full*; condominium buyers should provide an estimate for the homeowner's association fee. If this fee includes heat, include that information. If this is included in the association fee 9which will be shown on the loan application as these fees will be paid out of your monthly mortgage and put in an escrow account) then you will want to obtain a different policy similar to a renters policy to cover you personal belongings in the home and does not need to be disclosed on the application.
19. A check for the application fee. (Covers cost of credit report usually between 18-30 dollars and appraisal fee (varies between state and city and between conventional, FHA and VA loan)
*Please note that Home Owners Insurance is different than Premium Mortgage Insurance (PMI)
PMI is on mortgages over 80% Loan-to-Value (LTV) and is dropped off once a loan reaches the 80% LTV to which you remind your lender to drop it off if it does not happen. PMI is now tax deductable. In most cases is less expensive to obtain one loan and pay PMI than it is to obtain two loans to cover the Loan amount. Ask you Mortgage Rep to show you the difference between the two before choosing the loan you want. FHA is one loan and has Mortgage Insurance.
Also it is advisable to escrow your monthly property taxes and homeowners insurance. This is placed in an escrow account by the lender and paid out annually and bi-year which is applicable by the lender.
;)
;)
