Home Loan Application 4 great tips before shopping Sun Prairie homes

Real Estate Agent with Inventure Realty Group 56988-90

Home Loan Application and Sun Prairie homes 4 excellent tips to use now

 Home Loan Application / Sun Prairie Homes 4 excellent tips use now. As underwriting guidelines for lenders become more stringent, we need to re-examine what a good Home loan application looks like. As home buyers begin their search for a home, there are a few items they should be aware of that they can do to help get their mortgage loan application approved (with the best possible terms), and, at the same time, lessen some of the stress that goes along with the home loan application process.

1. Income documents

Most lenders want to see a full month of paystubs and two years’ complete Federal Tax Returns. Assembling them ahead of time and holding on to every paystub you get is a good idea even before you find a home and/or submit your mortgage loan application because it will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expenses are often crippling factors that, if explained and dealt with upfront, can make your home loan application approval smoother.

2. Asset documents

Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because large deposits can signal a new mortgage loan application that wouldn’t show up on your credit report yet. What’s a “large deposit”? Typically, any deposit that would represent more than your income can support. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period). Therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place. Received a gift? You will need a Gift Affidavit, proof of the donor’s ability and transfer of the funds. Any and all questions should be discussed with your home loan application officer.

3. Credit Score Optimization

Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit cards. That will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, apply for a new credit card or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don’t do anything that will require having your credit run without first discussing it with a home loan application professional who knows the impact it could have.

4. Appraisal Concerns

It’s unlikely you will make an offer to purchase without checking out comparable home sales. It’s also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently on the market and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions.

Overall, it is recommended that you hold onto copies of everything financial, think before allowing your credit to be run and work with an agent and loan officer who can use their experience to put your home loan application in its best possible light…as soon as you start thinking about buying a home. Start using these four tips now home Loan Application /Sun Prairie Homes.

Comments (2)

Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Bill - You have laid out an excellent explanation for potential buyers on how to get things to work out best when seeking funding for their part of the American Dream.

Oct 06, 2011 06:46 AM
Bill Crawley
Inventure Realty Group - Sun Prairie, WI
I'm not #1...You Are!!

Thank you Steve,

As a Realtor working very close with a lender helps me stay current on the lending side of things. While consulting with clients and communicating with them at a very high level. Using this method we are able to manage their expectations about the process from beginning to close. After closing clients say how great the experience was and they have a better appreciation of the amount of work we all put into make a deal close.


Oct 06, 2011 07:19 AM