What You Need To Get A Home Loan
First step is to get pre-approved for a home loan. This is a very important step in the home buying process. Being pre-approved gives you buying power, it shows the seller that you are serious and have the necessary funds to purchase.
To begin the pre-approval step your lender will need to verify employment, income, Credit, and Tax returns. Here is a list of documents you will need to provide.
1-Valid form of identification – State Authorized
2- Pay Stubs -2 months showing year to date earnings
3- Bank Statements -2 months most recent (all pages)
4- Asset Statements -all pages – i.e. 401k, investments, etc
5- Bankruptcy papers (if applicable)
6-Credit Explanations (if needed)
7- Tax returns last two years -all scheduled
8- W2’s last two years
If you are self employed, you will need additional items
1-Last two years of all corresponding returns (S-corps, LLC, Proprietorship, all schedules)
2- Letter of explanation of any derogatory credit information
Once you know how much you are approved to borrow, you can then decide how much you can afford. Buying a home is a long term commitment. Knowing how much you can afford is vital.
Down payment – Depending on your loan type your down payment can range from 0-20% Many FHA loans will require as little as 3% . There are several reasons to ask your lender for an FHA loan-vs-Conventional or an expensive risky sub-prime mortgage loan. Why not take advantage of the many benefits and protections that an FHA Mortgage offers.
Income is verified with the information you provide, two years most recent tax returns, w2’s ans pay stubs
Credit -Even if you do not have perfect credit, you may still qualify for a loan. Credit history or your credit score is used to determine your ability to pay, and how well you pay your debt. It also helps to measure your debt (Debt to Income Ratio)
Your can qualify for a home loan with a credit score as low as 580. With a credit score of 640 and above you may qualify for many down payment assistant programs available in the state.
