QUESTIONS YOU NEED TO EXPECT FROM YOUR MORTGAGE LENDER

Posted by V.K. [Mel] Melhado PA on Monday, February 21st, 2011 at 11:05am.

mortgage_300In today's market, you may already understand qualifying for a mortgage can be an intense process.

This process is more then doubled when applying for a mortgage for a condominium, because of the intense scrutiny the lenders are giving the condominium associations. They are looking to make sure that delinquents are few otherwise they will turn the application down because of the association.

When applying for a loan today, you can expect to be asked to provide all of your financial information and your will be expected to answer many, many questions.

Here are some of the things to expect:

FINANCIAL DATA

You will be asked a number of questions about your income and its source(s). You’ll be expected to produce documentation illustrating the figures you’ve provided. W-2 forms, bank statements, tax documents, legal agreements and so on are all documents that may be requested. If you have sources of income other than that from a full-time job, you will need to document them. For instance, if you want to count income from a rental property towards the total income declared on your application, you must produce a signed lease for the property. Plan on providing six months worth of bank statements from both checking and savings accounts as well.

EMPLOYMENT HISTORY

You will be asked about your employment history. The longer you’ve been in your current position, the better. However, that doesn’t mean you won’t qualify for a loan if you’ve recently switched jobs – especially if you’re still employed within the same industry.

 CREDIT SCORE

The lender will need to know your credit score. Not surprisingly, the higher your credit score, the better your chance of getting a mortgage loan. Although, again, it will depend on your situation and the type of mortgage for which you are applying.

PRIMARY RESIDENCE OR VACATION HOME OR RENTAL

The lender will need to know whether or not you intend to make the property your primary residence or if it will be a vacation home or an investment property. Lenders need this information because your interest rate and the amount you borrow can be contingent upon whether or not you plan to live in the house full time.

DOWN PAYMENT

How much of a down payment are you able to afford? If you’re considering an FHA loan, (at this time) you’ll only need 3.5 percent down. A conventional loan often requires a minimum of 5 percent down to qualify. Other factors can be a part of this including income and credit score, so understand that these are general guidelines. 

FEES

The lender will also want to know if you have enough cash on hand to pay for the extra fees involved with buying a home. You may receive assistance from the sellers, family members or even local programs that help first time homebuyers. In addition to the down payment, you must pay for an appraisal and inspection. These services tend to run $300-$400 apiece. You’ll also need to come up with earnest money, which can sometimes run several thousands of dollars depending on the property. There are also closing costs to consider, which can run about 3 to 4 percent of the home’s price. Sellers often will offer to pay for closing costs (or at least a portion of them).

Discuss these matters with your real estate and mortgage professionals up front, so you know exactly what you’ll need to provide and to whom. The quicker you get your paperwork in order, the quicker you can get pre-approved and begin the process of looking for your next home.

 

V.K. [Mel] Melhado PA
Fine Home Specialist
Preview Naples Group
Premier Sotheby's International Realty
800.708.8028 Direct
www.previewnaples.com
mailto:mel@previewnaples.com


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