With good preparation, most things are easier. That works in mortgages too! Today, I want to give you some ideas that can make your mortgage experience less painful.
Income Items:
- Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.
- Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
- Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.
Asset Items:
Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
- You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
- Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
- If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).
Credit Items:
- Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
- Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
- Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.
When buying a home, remember the Boy Scout motto, “Be prepared.” Following these suggestions will make your loan approval easier and less stressful.
— Reposted with permission of Keeping Current Matters
About The Staten Island Board of REALTORS® (SIBOR)
The Staten Island Board of REALTORS® (SIBOR) is the largest not-for-profit trade association in Staten Island, N.Y.
SIBOR exists to enhance the ability and opportunity of its members to conduct their business successfully and ethically; and to promote the preservation of the public’s right to own, transfer and use real property.
Comprised of over 1,600 members, SIBOR serves real estate agents, brokers and affiliated professionals throughout the borough and surrounding areas.
SIBOR is the provider of the Staten Island Multiple Listing Service Inc. (SIMLS), which works as a clearinghouse through which more than 250 local real estate firms exchange information on properties they have listed for sale. Together, its members participate in over 3,000 real estate transactions every year.
All SIBOR members belong to the New York State Association of REALTORS® (NYSAR) and the National Association of REALTORS® (NAR).
SIBOR may be reached at 718-928-3220 and visited online at http://siborrealtors.com.
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