Getting A Home Loan Secured
There are fun parts to buying a home, such as driving around neighborhoods you are interested in and looking through beautiful houses that you think might fit the bill. Even going online and seeing what kinds of houses in various price ranges are available is an enjoyable experience. Then comes the moment when you find the house that speaks to you, the place you can see yourself putting down roots, and deciding that this will be your new place. The fun pretty much stops at that point.
You now have to subject yourself to the arduous process known as "getting a home loan", which is basically the vehicle through which you will pay off your dream house over the course of the next three decades. Before taking that step, be sure to assemble the information any lender is going to ask for.
- Pay stubs for the past 2-3 months
- W-2 forms for the past 2 years
- Information on long-term debts
- Recent bank statements
- Tax returns for the past 2 years
- Proof of any other income
- Address and description of the property you wish to buy
- Sales contract
Be advised that the lender will pull your credit history, so it is always a good idea to pull a copy yourself every year to make sure there is nothing on your report that may cause problems. This author recently began the mortgage loan process, and a credit inquiry discovered a credit card with a major balance….an account that my name hadn't been associated with in six months. It is far better to know these things in advance. You can expect the application process to take anywhere from 1-6 weeks, which explains the length of time between acceptance of your purchase offer and the closing.
Keep in mind that there are three different credit reporting agencies, all of which use slightly different formulas to determine your credit score. As a result, your score may vary slightly from agency to agency. The three reporting agencies are Equifax, Experian, and Trans-Union. Be sure to obtain a copy from all three sources, and go through them thoroughly to make sure that all information is up to date.
If you do find a mistake in your credit information, it can usually be resolved by writing to the reporting agency, identifying the error, and providing some documentation that the problem has been resolved or that it is an error all on its own. It may take up to 60 days for any changes in your credit to appear on any of the credit reports.
When looking for a lender, choose a company that is financially stable, with a good reputation when it comes to customer service. You are signing over the next thirty years of your life to these people, so you need to make it someone with whom you feel comfortable. It should also be a lender located locally that will allow you instant access if need be. Your real estate agent will be a good source for lender suggestions; I many cases, they will already have someone that they trust and work with on a regular basis.
The first step is a "pre-qualification", in which you give the lender basic information such as income, debts, and what sort of down payment you can afford. This does not obligate you in any way and helps you arrive at an estimated figure that you may be able to spend on a home.
Pre-approval is a slightly different animal, as it is the lenders commitment to lend to you. This is where you begin assembling all of the elements listed above and going through the approval process. Pre-approval will pretty much set in stone what you can afford and what kind of house you should be looking at.
It is usually a very good idea to wait for your lender to give you the go ahead before you start packing away the china. Once you have that final approval, you should still have a few weeks left before final closing, plenty of time to pack up the farm and get ready for the next step….moving.
So get your ducks in a row, make sure you sign on all the right lines, and enjoy your new home!
About the Author
Billy D Ritchie is the Director Of Content for LeadsByFone, LLC, a lead generation company servicing the flood clean up and water damage restoration industry.
When not writing and educating folks about the perils of water damage, he is also a freelance writer, sometime actor, and formerly professional musician. He also enjoys spending his weekends building and flying model rockets.
Visit him online at http://www.waterdamagelocal.com
Identity Theft
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writing a security report
writing a security report
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