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The Ins and Outs of Obtaining a Mortgage

May 25, 2017

Friends, this is an article series based on the different facets of the real estate transaction.

What is Escrow, What is Title, and The Ins and Outs of Obtaining a Mortgage. It used to be that if someone wanted to purchase a home, they had to save up for it. As you can imagine, it would sometimes take people the better part of their lives to do that. Luckily we have banks that are more than happy to lend the required funds for home purchasing. If you are purchasing a home and need to obtain a mortgage there are specific steps to follow.

 

 Before the home search process begins, you need to have an understanding of how much home you can buy which means getting prequalified for a loan unless you will be paying for that home out of your cash assets. I suggest meeting with several lenders to determine the amount you qualify for.
 

Documentation for prequalification may include:

  • Verification of your income (and perhaps your spouse’s or whomever you will be purchasing the home with)

  • Verification of your debts (credit cards, car loans, alimony, etc). This may be obtained via a credit report.

  • Determining how much you have for a down payment.

Based on this, the lender will “prequalify” you for a certain loan amount and property purchase amount, the difference between the two being the down payment. Then the house search can begin with this budget in mind.

 

Once we have a contract in place to purchase, it is time to have your loan approved by the bank. In order to take this step, the bank will likely ask for additional documentation such as:

  • Copies of your Federal tax forms for the last several years

  • Copies of your most recent paystubs

  • Verbal verification of employment from your employer

  • Formal credit report

  • Explanation for anything on your credit report that causes concern

  • Bank account information including documentation of any deposits

  • Verification of funds in any asset accounts

  • Verification of funds transfer when selling a house and purchasing another

While this may sound daunting, it isn’t if you have your ducks in a row ahead of time. When you get prequalified with the lender, I suggest receiving a list of everything you may need to provide and make sure you have these items in hand when you make your offer. This way your loan can get underway smoothly.
 

Because there have been a lot of changes in lending over the last few years in response to the subprime lending challenges, banks are cautious about lending and you may be asked for additional information outside the list. Do your best to be flexible and provide all documents in a timely manner to keep your loan moving forward.
 

I have a several lenders with a number of different programs available. We can find you a lender to best suit your needs. Please contact me: (206)  730-0962 or send an email: nina.bjornstal@sothebysrealty.com

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