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5 Documents First-time Home-buyers Need for a Smoother Purchasing Process

MortgageWith all the work that goes into finding the kind of home you’ll want to put an offer on, it can be easy to forget about all the little things that happen after the deal has been made. While the paperwork involved in purchasing may seem like a long way off, here’s a quick review of some of the documents you’ll need when the time comes to seal the deal.

Your Credit Report

It’s important to review your credit before putting an offer in, so ensure that you request your credit report in advance and review it for any errors that may be present. If there are any discrepancies negatively impacting your credit score, you’ll be able to have them corrected before they can cause an issue with your real estate purchase.

Pay Stub Proof

In order to ascertain your ability to pay off your monthly mortgage, you will need to provide at least two pay stubs from your current place of employment. You won’t want to give away your originals, but a photocopy of your last two paychecks usually serves as adequate verification.

Recent Bank Statements

The number of bank statements required to prove your credit history may change depending on the lender you’re dealing with, but you’ll probably need photocopies from the last two to three months. This will be a means of proving your financial health as well as your ability to pay your monthly mortgage in the event of interest rate hikes or other fiscal setbacks.

Tax Return Copies

Your federal tax returns will provide further proof of your employment and financial standing, so the last two years of these – complete with your signature – will need to be submitted. Keep in mind that any schedules you’ve filled out to complete your yearly returns should also be included.

Additional Asset Statements

In addition to recent bank statements, if you have any stocks and bonds, mutual funds, RRSPs or other investments, you should also provide statements of proof for these. While these accounts will only require your most recent statements, they will be beneficial in providing a more comprehensive picture of your finances.

There are many aspects of purchasing a home that can be time consuming, but having the documents you need beforehand can save a lot of stress when crunch time comes. If you’re planning on purchasing a home soon, contact us for more information.

A Step-by-step Guide to Preparing Your Finances for the Mortgage Pre-approval Process

MortgageeBeing pre-approved for a mortgage isn’t just a way to get a step ahead, in many cases it’s a necessity to buying a home. Sellers don’t want to go through the negotiation process of selling their home only to have the buyer drop out when they can’t get approval for the mortgage they were relying on.

The Difference Between Pre-Qualification And Pre-Approval

Pre-qualification is a faster process than pre-approval and is usually a best estimate based on how the borrower answers certain questions about their financial history and status.

Pre-approval is way more valuable to a borrower than pre-qualification because it is a commitment from a lender for a decided amount after they have completed an in-depth verification process based on the submitted documentation.

Preparing For The Pre-Approval Process

The majority of lenders will require the same documentation in order to pre-approve anybody for a mortgage, but there is more information they will need in certain cases.

Anybody applying for a pre-approval will need to ready at least two years’ worth of financial information, including W-2s, Form 1099s and federal tax returns as well as current banking and financial records.

Here is where the pre-approval process gets more in-depth, not only will the lender need to see how much money the applicant has in their bank, but they will need proof as to where the money came from. The lender will need to know the difference between income, gifts or investment withdrawals to help them make their decision.

Having this information ready in advance will speed up the process significantly.

Prepare Proof Of Assets And Allow A Credit Check

Applicants will be required to prove ownership of all assets and will need a letter to prove that any cash gifts given to them to assist with the payment are not loans that need to be paid back. This is important information that will help a lender make a decision, so having the letter ready will save a lot of time.

The lender will also need to check the applicant’s credit to compare it to the applicant’s income. Many people refuse the credit check because they are afraid it will impact their credit score, but the impact is very low and the lender needs this information. It is also a good way to learn about any errors in the credit report early, before they can pose a problem down the line.

We work with lenders who know the process inside and out and can determine, within, 24 hours, your qualification status for a loan.  At Catskill Country Real Estate, we suggest you get prequalified first, and then begin the loan approval process thereafter.  You, the buyer, will have a head start on others and be able to make the deal while another buyer is still “thinking” about getting a loan.