FAMILY FINANCE HOW TO: GET PRE-APPROVED FOR A HOME LOAN

By Tim Jones

 

Although the homebuying process can be somewhat overwhelming, there are some steps you can take to ease that process. One of those initial steps is to get pre-qualified for a home loan: this pre-approval step will be helpful and will ease your mind as you start looking for your dream home! Here's how to get a jump start on the process:

Gather all of your personal financial documents

Such documents would include the most recent two years of W2s, two years of personal federal tax returns (1040s), the past 30 days of paystubs, and the most recent two months of your bank statements and any brokerage or retirement account statements.

Prepare a list of your debts and assets

For debts, prepare a list that includes current rent or mortgage, installment loans, auto loans, credit cards, student loans, etc. Create an itemized list of assets as well. Your lender will want to know which debts are current obligations  and which assets you have available for down payment, closing costs and pre-paid items such as property taxes and homeowner’s insurance.

Prepare a personal monthly written budget

What is a comfortable mortgage payment based on your budget? Your lender will pre-qualify you for the maximum amount they think you can afford, but is that number really comfortable for you?

Research lenders for a home mortgage

When getting pre-qualified for a mortgage loan, you will want to consider several things when selecting a lender. What type of products and loan programs do they offer? There are particular loan programs that may fit your needs better. Ask the lender about fixed rates, adjustable rate loans, government loans (FHA, VA, RHS, KHC), or construction loans if you’re building a home. Each lender will have a different menu of programs. Does the lender have programs specific to various types of properties: single-family, multi-family, condominium, or townhome? Each of these types of loans will have different terms. Does the lender service their own loans or sell them off to a different company? This can be important to you if you want to handle your payments and correspondence locally rather out of town or state. Don’t be afraid to ask!

Apply for the pre-qualification

Does the lender you choose require you to come in and apply in person (highly recommended if you are a first-time homebuyer), over the phone or online?  Some lenders have the capabilities for you to apply and pre-qualify online from the convenience of your home, 24 hours per day, 7 days a week. Usually the pre-qualification process can be finished the same day you apply, or within 24 hours depending on the type of mortgage for which you are applying.


Tim Jones, United Bank & Capital Trust Company

Senior Vice President/Secondary Market Mortgage Manager | [email protected] | 859.881.7356

 

 

 



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