We all work for a reason, our “why”! Within that “why” the ultimate dream is to be a homeowner. If you’re already blessed to say you are then you can say you did it! But if not then this is when the work begins. After reviewing all of your assets, liabilities, finances, and your credit, you will need to GET PRE-APPROVED!
To get approved you must speak to the bank or a loan officer, of your choice (do your research and/or ask for referrals). They will be able to guide you in the right direction, as in which type of loan suits your needs and the documents/paperwork required, to apply for that loan.
The documents/paperwork that are generally required are (but not limited to):
- A couple of years of tax returns, Federal and State to prove income and employment.
- A copy of your W-2 forms and a couple of your most recent pay stubs, to prove your wage. If you are self employed things will be different! If self employed you will need to provide your company information, a year-to-date profit and loss statement, a couple of years of records, including all 1099 forms used to file your taxes, etc.
- Any additional income made off of owning real estate, for example collecting rent.
- You will need to provide any information on additional assets, which would be in the form of bank statements (to all accounts), and statements to all of your retirement accounts, IRA’s, 401(k)s, etc.
- You will also need to provide any information on any debts owed, for example student loans, car loans, etc. to help calculate your debt to income ratio.
- They also will run your credit, to see what type of payment history you may have. If credit is the only thing you don’t have (I mean no credit, not bad credit) there are some banks and loan officers that allow rental, utility, or any other payment history to be used. If you have bad credit look into getting it fixed, with a credit specialist.
- Some other important documents to have are previous rental history (about 12 months), any previous bankruptcy or foreclosures, divorce papers, and/or any monetary gift letter.
After providing all the documents requested, the bank or loan officer will put together your application, submit it to the underwriter, and wait for them to either deny or approve it. If denied find out why and get started on fixing it, right away. If approved, you will then know what your price range is, and what your maximum price will ultimately be!
We are not financial advisors or credit specialists.