Documents & Processing
Exciting stuff, right? The thought of document collection and loan application processing doesn’t sound fun to most of us, but this is a part of the home buying process that needs a ton of attention. Fortunately, your agent and your loan officer are here to help make plain sense of it all. The prequalification process is where it all starts. Lenders prequalify a buyer based on income, savings, debt, and credit history among other factors depending on the loan type. Typical items to you will need to prequalify for a home loan include:
- W-2 forms for the last two years
- Pay stubs for the most recent 30 day period
- Bank statements for all financial accounts for the most recent 60 day period
- Signed tax returns for the most recent tax year
A lender may need to see other documents depending on a number of circumstances and loan type for which you’re attempting to prequalify. You’re lender will also need to run a credit report and verify your employment. It is important during the entire process to carefully complete forms and provide complete documents. Attempting to not disclose any potentially negative credit or financial issues will ultimately delay the process and could result in a mortgage denial. Good or bad, honest disclosure is the best path forward to determining your eligibility for a home loan.
Let our experts guide you through the financing journey and save you a ton of time, frustration, and stress.
Assuming the prequalification process is complete, and a Blake Team agent has located your dream home in the meantime, you will have made an offer, negotiated contingencies, and are ready to put a contract in place. Now is when the seller will ask for earnest money, or a deposit that secures your offer while your finalizing the loan process. The earnest payment amount can vary widely depending on the price of the home, from several hundred to a few thousand dollars. With your new home under contract, it’s time to make sure you get an inspection ordered. A good inspection will run at least a couple hundred dollars, but is well worth it to catch major structural issues that could cost you much more money down the road. While you’re working through the inspection, the lender will be working through the appraisal to make sure the home is worth what you’re requesting in a loan. This is also the time the lender may step up document requests to verify income and assets to officially qualify you for the loan, and require you to secure and document homeowners insurance for the new property.
Once you’ve made it this far, it’s time to “freeze.” The lender will be checking everything you’ve submitted, and consistency is important at this time. Don’t start dipping into your credit, buy a new car, quit your job, miss a payment, or do anything else that would change your current credit or overall financial standing. When closing day finally arrives, you’ll sit down with your Blake Team agent, the seller and their agent, the lender and/or title company closing agent. A few dozen signatures later, you get the keys and are the proud owner of a new home!