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Mortgage Application Checklist

June 24, 2008

 

One of the most important things you will do when deciding to purchase a Buffalo home is how you are going to finance the purchase.   If you plan on obtaining a mortgage, rules are changing and you need to understand the process.  At bear minimum you need to pre-qualify for a mortgage for no other reason that to determine what you can afford to purchase.   This way we can ensure you are seeing Buffalo homes that you can afford. There is nothing more frustrating to a Buyer than to fall in love with the absolutely perfect home only discover you cannot afford it.

Pre-qualify vs. Pre-approval

To start, it might be helpful to explain the difference between pre-qualify and pre-approval.   Many Real Estate Professionals use the terms and you may not know the difference between the two.  The difference is significant:

  • Pre-qualify – is when the mortgage professional asks you several questions, and based on your answers they tell us you would qualify for a particular amount
  • Pre-approval – requires documentation and is based on the facts gathered.   The approval will be contingent on the home’s appraisal and that your financial situation does not change.

Mortgage pre-approval will also make you a stronger buyer on paper when we present offers to sellers.  So not only does it give you a competitive advantage it will enable you to close quickly when you do find the right Buffalo home.

Before you start looking at houses with me, I will ask that you pre-qualify for a mortgage if you plan on financing your home purchase.   This will assist me in helping you find the right home.  

Documentation Checklist

If you are not purchasing your Buffalo area home outright with cash, you will need to apply for a Mortgage. The process of your application for a Mortgage can be confusing.  In an effort to make it ease the confusion, we have assembled a list of all the documents you will need for your Buffalo Mortgage application.   By being prepared and having this information gathered prior to meeting with your mortgage professional it will speed the process along!

EMPLOYMENT DOCUMENTATION

  • Most recent two years complete tax returns with all schedules.
  • Most recent two years W-2’s, 1099’s, etc.
  • Most recent pay stubs covering one month period. If Applicable: Self-Employed will need Two years Tax Returns and YTD Profit & Loss Statement.

SAVINGS DOCUMENTATION

  • Most recent three months complete bank statements for both checking and savings accounts.
  • Most recent statement from retirement, 401k, mutual funds, money market, stocks, etc.

CREDIT INFORMATION

  • Most recent statements from your credit cards and other monthly revolving charges, indicating minimum payments and account numbers.
  • Copy of complete Bankruptcy and Discharge Papers.
  • You may be required to provide the origin of your down payment. If money for down payment is a gift from a relative, bring to the interview a copy of gift letter and copy of gift check. The gift letter states that the money will not have to be repaid.

RENTAL INFORMATION

  • Name, Address, and Phone number of your landlord
  • 12 months cancelled rent checks

PERSONAL INFORMATION (for each applicant)

  • Copy of Drivers License
  • Copy of Social Security Card
  • Copy of complete Divorce, Palimony, Alimony Papers

Once Approved – How to Stay Approved

It is important to keep your mortgage approval once you have gotten it.  You don’t want to do anything to jeopardize that approval.  

Lenders consider debt-to-income ratio when approving you for a mortgage loan. Only 28 percent of your income can be used for your mortgage payment, which includes taxes and insurance; and 36 percent for the mortgage payment plus the rest of your debt. If you do not conform to those lending guidelines, you risk your mortgage approval.

Here are some things that can affect that approval:

  • The purchase of a big ticket item – like a car, boat or furniture – prior to closing, you’re at risk of having a red flag show up on your credit report. This may change your debt-to-income ratio and affect your Buffalo mortgage approval.
  • Don’t make changes in your bank accounts, or move money around.  This may affect your mortgage approval and may delay final approval as you have to document those changes.
  • Don’t change your job situation.   This will cause a red flag for an Underwriter.  
  • Make sure that you continue to pay your bills on-time.  A Buffalo mortgage can be denied if your credit rating falters.

Ready to purchase a Buffalo area home?   Would you like to start the process?   Feel free to get in touch with me at (716) 743-5297 to discuss your Real Estate needs.

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