Home Finance

While it's flattering to let banks compete over you, as some companies suggest, applying for a loan is a complicated process requiring some preparation on your part.  Among other considerations, you'll want to look at your credit history to see if there are any glitches you can fix before you talk to a lender.  You'll need documents, including paystubs, bank statements, tax returns, and revolving charges (monthly payments on credit cards, autos, boats, etc.).

There are advantages and disadvantages to types of lenders, loans, and terms that you'll need to check out.  Most important, you'll have to decide on an amount, that you can afford to spend on a home purchase or refinance of your current mortgage.

Before you shop for a home, you'll need to get pre-approved by a lender, which means the lender has actually evaluated your personal finances and has agreed to give you a pre-approval letter.  A lender's pre-approval means you have passed their criteria to qualify for a loan for a certain amount, but loan approval doesn't happen until the lender can process the price of the home, a market appraisal, and underwriting for final approval.  Once a loan is approved, it can close quickly.

Your Records

You'll need to get your financial records in order, including:

• W-2 forms, or business tax return forms if you're self employed, for the last two or three years for every person signing the loan.
• Copies of one or more months of pay stubs from every person signing the loan.
• Copies of two to four months of bank or credit union statements for both checking and savings accounts, and so on.

Lenders generally require a credit report, which they will get themselves.  While you may have already obtained one, so you can take care of any discrepancies, lenders want to see for themselves what kind of risk you pose.

Next Steps

• Get Pre-approved
• Buyers
• Sellers
• Contact us