Buying a home shouldn’t mean you have to expect the unexpected.
My approach as a mortgage educator puts the power of knowledge in YOUR HANDS.
While it’s true that purchasing a home and working through the process requires a lot of time and resources, it certainly doesn’t have to be full of surprises.
One of the major steps to buying a home is securing a straight-forward and customized loan program that will allow you to fulfil your goal of owning a home. Before that, however, you must apply for a loan.
Let’s demystify this process by telling you what you should expect in the course of filling out your loan application.
Your biggest concern may be the amount you’ll have to pay for a down payment. As part of the application process, your lender will consider the amount, but do not let that discourage you. Various programs have different requirements and the down payment amount you plan today may be more than enough. Remember, the range for a down payment can start in the single digits.
Your down payment will also determine whether your loan program will require private mortgage insurance. If you pay more than 20 percent, you won’t have to worry about this insurance and you may even qualify for more favorable terms with a larger down payment.
The last two years of your employment will be closely reviewed by your lender. Mostly, banks and lenders are looking for job stability, and therefore will verify employment. Length of time spent in your profession is also a consideration.
If you’re a self-employed worker, be prepared to provide a little more information, including tax documents and additional records for review. Please note we have a program that can streamline the process for those who are self-employed.
Type of Income
Just as important as your employment history is the type of income you possess when it comes to the application process. Lenders want to ensure that your monthly income can sufficiently cover the mortgage costs.
Salary, bonuses and dividends or interest from other sources also count. Depending on the type of income you’re bringing in, the documentation you’ll need to provide will vary.
Also, keep in mind that it may be an inopportune time to make a job change during this critical period.
Obviously, your financial health is an important consideration for obtaining a loan. Lenders will study your credit score and history before making a decision.
Your track record of making payments on time and maintaining a healthy balance of debt and credit will weigh heavily on your application. Your credit score/history, and the other factors listed above, will determine your type of loan and the interest rate.
As you navigate this exciting process, it’s important that you remain in the know. I sincerely believe my focus on mortgage education will empower you with all the information you need to make these important decisions with confidence.
The choices you make during this process MATTER. So make sure you’re well prepared for whatever comes your way.
The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.
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