What Do I need for a bank Preapproval l Home Buyer

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What Do I need for a bank Preapproval l Home Buyer Tips

Loan Apps: What You Need 4 mortgage tips low downpayment

Applying for a home loan sometimes feels as long, complicated and arduous as astronaut training. While the process is difficult, it shouldn’t prevent you from following your dreams of home ownership. With some preparation, applying for a mortgage loan can easier y anticipated. These helpful tips and list of items will make the preapproval process easy. At any time, you can start a quick, secure application, or talk with a local lender direct at, 952-913-7283 or via email.

Before we gather up the substantial amount of paper you’ll need, there are a few things you should find out. First of all, ask how long the loan approval process will take. It's important that the lender you choose will be timely in getting you approved so that you are not missing a possible opportunity to purchase your new home.

Next, you need to be aware that you’ll have to disclose where you got the money for your down payment. Typically, this can be done by reviewing your bank statements compared to your W-2, or 1099 that you would receive from your employer. Tax return money can also be used as a down payment as long as it can be documented where those funds came from. If a friend or relative is planning on helping you with that portion, talk with a lender for the proper procedures as not documenting these funds correctly could delay or cancel the possibility of your purchase.

Find out if your state allows mortgage prepayment penalties. You need to be aware that if these are legal where you are, there will be a charge if you pay off your mortgage early through refinance or multiple principal payments. Avoid mortgages that require a prepayment penalty beyond the third year.

Now get ready—the following is what you’ll need when applying for that loan:

Asset items

l Bank statements for previous two months (sometimes three) on all accounts. All pages, even if you don't think them important l Statements for two months on all stocks, mutual funds, bonds, etc. l Copy of latest 401K statement (or other retirement assets because they can count as reserves) l Explanations for any large deposits and source of those funds l Copy of HUD1 Settlement Statement on recent sales of homes l Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed l Gift letter (if some of the funds come as a gift from a family member - the lender will supply a blank form) l Gifts can also require: 1. Verification of donor’s ability to make the gift (bank statement) 2. Copy of the check used to make the gift 3. Copy of the deposit receipt showing the funds deposited into bank account or escrow

Note: many get their statements of various kinds over the internet and these are not always acceptable to lenders, especially when the printed version does not contain the borrower's name, account number, and the name of the institution.

Credit items

l Landlord’s name, address, and phone number (if you rent - for verification of rental) l Explanations for any of the following items which may appear on your credit report: Late payments; Credit inquiries in the last 90 days; Charge-offs; Collections; Judgments; Liens l Copy of bankruptcy papers if you have filed bankruptcy within the last seven years

FHA loans

l Copy of Social Security Card (or other documentation of social security number) l Copy of Driver’s license

Income items

l W2 forms for the last two years l Most recent pay stubs covering a 30 day period l Federal tax returns (1040’s) for the last two years, if: you are self-employed; earn regular income from capital gains; earn sizable interest income, etc.; earn more than 25% of your income from commissions or bonuses; own rental property; or are in a career where you are likely to take non-reimbursed business expenses). l Year-to-Date Profit and Loss Statement (for self employed) l Corporate or Partnership tax returns (if you own more than 25% of the business) l Pension Award letter (for retired individuals) l Social Security Award letters (for those on Social Security)

Miscellaneous items

l Copy of purchase agreement (if you have already made an offer) l To document receipt of child support (if you desire to show it as income) l Copy of Divorce Settlement (to show the amount) l Copies of twelve months canceled checks to document actual receipt of funds


l Copy of your most recent monthly mortgage bill l Copy of Note on existing loan l Copy of HUD1 Settlement Statement on existing loan

VA loans

l Copy of DD214

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