Preparing for your Lender before you Buy a Home – Tips from Top Producing Agent, Rama Mehra
Buying a home is one of the biggest commitments that you can make in life. Understanding the whole process can be quite intimidating and even though there is a lot of information on the internet, a major chunk of that may actually be misinformation and misleading!
When you hire your Realtor, the knowledge the agent shares with you is critical. Especially when you have a Realtor who understands the lending process. Our team watches the lending process for our buyers very closely to make sure they understand how to navigate the system and move forward with confidence. Also as part of our high level customer service, we make sure the lenders are constantly kept on their toes by following up daily on file progress, critical dates and client communication.
Even before you contact your Realtor to start your home search, it is very critical to get the pre approval in place. A preapproval is very different from a pre qualification. With a preapproval, the lender will run your credit, verify your income documentation, check your debt to income ratios (DTI), make sure that based on your credit if there are any possible glitches that could hinder the file when in processing. That is why when we work with our buyers, we ensure that this critical piece is taken care of ahead of time.
Many times clients come to us with pre qualification, which in today’s world mean nothing. based on the worthless piece of paper that a lazy loan officer generated, it is not possible to purchase a home. It is a huge pitfall for first time home buyers who do not understand what that document means.
For getting a preapproval, usually these are the items that your lender will require.
Preparing for the Lender
- Full names of all purchasers as they are to appear on title.
- Social security numbers of all purchasers.
- Present residence address for all purchasers.
- Previous address for all purchasers going back two years if they have not resided in the present home for two years.
- Home, office, cell phone numbers.
- Present Employer: Name, address and a contact person to send employment verification form.
- Explanation for any gap during 2 year history.
- Relocation letter for any transferees – giving date, salary, new location, and any relocation benefits.
- Previous Employer: Name, address, and a contact person, going back 2 years if not in present job 2 full years.
- Present Salary: Year to date pay stub and last 2 years’ W-2s
- If any variable income, commission, part-time income, bonus, overtime, interest income, etc., is being used to qualify: 2 years’ signed federal tax returns and W-2s and/or 1099s.
- If self-employed: 2 years’ signed federal individual and corporate returns (if applicable). Also a profit and loss statement and balance sheet.
- Diploma or transcript if student during 2 year period.
- Other Income
- Rental Income: Copy of lease which is current and at least one year in length.
- Alimony and Child Support (only if used for qualification): Copy of divorce decree and property settlement (ratified) setting out terms. Proof of payment will also be requested at application.
- Income From Notes Held: A copy of the ratified note.
- Retirement, Social Security and Disability Income: Copy of award letter and latest check showing amount of present payment. Copy of end of year statement if applicable.
- Assets- Bank Accounts: Name of bank, address, account numbers, types of accounts, and present balances. With checking, use average balances.
- Copy of two most recent statements of all accounts.
- Stocks and Bonds: Copy of certificates or copy of recent (within 30 days) broker statement listing the holdings.
- Life Insurance: Cash value, only if being used for down payment.
- Vehicles: Year, make, and value. Copy of title if under 4 years old with no outstanding lien.
- Real Estate: Address and market value. If free and clear, deed of release, deed or mortgage payoff.
- Present Home: Copy of sales contract, settlement sheet and/or lease.
- Gift Letter: Form will be provided by financial representative. Donor Capacity must be verified. Receipt of funds must be shown in account.
- Credit Cards: Account numbers and outstanding balances.
- Loans (Auto, Mortgage, Personal, Student, etc.): Name of institution, address, account numbers, outstanding balances, monthly payments, months left on loan.
- Copy of next payment coupon. 12 month’s statements or canceled checks for present mortgage.
- Alimony and Child Support: Copy of Ratified Decree and property settlement setting out terms.
- Certificate of Eligibility: To obtain certificate, you will need a DD-214 (Separation of Service) or if in the Service, you will need a Statement of Service signed by Commanding Officer of Personnel Officer (certificate must be updated prior to application).
- If in service, you will need Authorization to Live Off Base (DD-1717 from Housing Office) and Transfer Orders (if applicable).
If you are in the market looking to buy a home and need assistance with this complicated process, Call Rama Mehra today at (925)-415-0835. Rama Mehra is a Top Performing Agent in the San Ramon area, providing Real Estate Services in San Ramon, Danville, Dublin, Pleasanton, Castro Valley, Hayward, Stonebrae, Walnut Creek, Fremont, South Bay,San Francisco, and Peninsula areas. Our Team is diversified in various Bay area cities and partners with other top agents in the Bay area to provide the highest level of service and expertise to our clients.