Somerset Mortgage programs abound:  jumbo financing  remains available to qualified borrowers to purchase a house and to do rate, term and cash-out refinancing for loan amounts of more than 729k.. Fannie Mae has raised loan limits for Somerset Mortgage programs up to $729k, and the FHA Loan Limit is $729,750 as well.   USDA n money down loans are available in parts of Somerset County as well.  With my office in Somerset County, I would like to provide some tips (as well as questions to ask a prospective lender regarding their loan parameters) to help you qualify for a loan as well as documentation required to close on a Somerset Mortgage loan in a timely fashion:

A.  Review your credit rating. Jumbo loans now often want a minimum 680, 700, or even a 720, or higher credit score. A 620 credit score is the minimum for FHA and VA mortgage loans currently. Fannie Mae mortgage loans have credit adjustments for credit scores starting at scores under 740.  You can ask your Somerset Mortgage loan officer to review your credit report with you or go to a free credit reporting service to review a copy of your credit report. You will want to check your credit for errors and any late payments, high balances, or loans for which you have co-signed (like student loans).  For more information, contact a reputable loan officer.  Ask your lender what their credit score policy is for your particular loan.

B.  Check your home's value. Nothing is more disappointing than someone's home not appraising for enough to qualify for a refinance or purchase. Zillow is an OK to start, and you also may want to consult a real estate professional if you are refinancing to gauge the market trends in your area. Local papers often list recent sales prices and addresses as well. I strongly urge anyone buying a home to use a buyer's agent to represent them for their purchase. Review with your Somerset Mortgage lender what the maximum loan to value is for your particular loan program. All lenders will scrutinize an appraisal, and many lenders require a review appraisal or a second full appraisal for large loans.

C.  Check your income.  A Somerset Mortgage loan may not include bonus income at all, or may require a low loan-to value (usually under 75%) to include bonus income. If you are self employed or have a small side business, review your actual claimed income or loss. Lenders now check with the IRS for what your total claimed income is prior to closing a loan, via a form 4506.  If you have W-2 income but substantial business losses, this could present an issue on a fully documented  loan.  Check with your lender beforehand and present 2 years worth of SIGNED tax returns. Presenting a signed return verifies that it is indeed what you filed with the IRS.

D.  Review your asset "reserves." While some lenders do not even verify asset reserves for jumbo loans, most want to see some money left over in savings after closing. Usually, a lender wants to see  PITI reserves or a certain number of months total mortgage payments in savings. These reserves can be in the form of an IRA, 401k, stocks, checking, savings, etc.  Somerset Mortgage lenders want to see 2 months of ALL PAGES of asset accounts. Accounts such as an IRA or 401k are usually counted as 60-70% of their face value towards reserves due to withdrawal and tax penalties/liabilities, if applicable. Many lenders require 6-24 months or more PITI reserves, depending on the loan's size.

E.  Decide what type of loan you want. 40, 30, 20, and 15-year fixed loans have different rates and payments. If you plan on staying in your home less than 10 years, you may want to entertain an adjustable rate mortgage for a lower interest rate. An interest-only loan may be attractive if you plan on making lump sum payments, or simply want to make minimal payments.  Interest-Only and Adjustable Rate Mortgages are not for everyone, as we have learned over the last few years. Some people, however, enjoy the flexibility of an interest-only loan.  Learn how an ARM Mortgage works. Get ARM details in writing from your lender.

F.  Have your documentation ready. Your Somerset Mortgage lender isn't singling you out if they ask (in addition to income/asset information) for a recent phone bill with your address and phone number, a copy of a legible drivers license, homeowners insurance declaration page, credit inquiry letter, and even a credit explanation letter. This is standard now for documenting a loan file.