How do I get qualified for a loan? This is a question we hear from first time home buyers, but also from those who haven’t purchased a home for some time. Many buyers are not aware that getting truly qualified should be accomplished before viewing homes. We can save everyone heartaches by helping them understand what’s really required at this point in history; not just telling them to “get qualified,” but prepping them a little before they even call the mortgage broker.
Prepare ahead. A conversation with a local banker used to be enough. Even in the recent past, many qualification letters were accepted by sellers in order to get a contract signed. But these days, too many of those deals fall apart early on, and it’s now time to go further into the process. When recommending great mortgage brokers, fear and apprehension can still cause procrastination. In order to help them get prepped, I often send a simple list of items the mortgage person is likely to ask for, and they can begin collecting their financials ahead of their phone call with the lender:
Items needed to begin loan process:
· Last two years tax returns
· Last two years W2s and/or 1099s
· Most recent 30 days of paycheck stubs
· Last 2 months bank statements
· Pension income letter
· Most recent statements of other assets such as 401K, IRA, stocks, bonds
· Social Security awards letter
· Divorce decree if applicable
· Copy of driver’s license and social security card
· Copy of any child support or alimony if paid or received
· Copy of any other income received (retirement, disability, second job, other)
· List of mortgage payments and equity lines of credit on any other properties
currently owned; and any current leases held.
Once the financial file comes together, buyers often feel empowered, more in control of their own situation, and more prepared to get things rolling. Hopefully they are now a giant step closer to being in their new home, and the home search fun can begin.