Recently, I sat down with Jim VanSlyck, from Thoroughbred Mortgage, Houlihan Lawrence’s preferred lender to discuss how to become a 5 star loan applicant. As mortgage guidelines have tightened, it’s more important than ever to be properly prepared and informed. There are some helpful insider tips to ensuring you achieve your goal of a successful mortgage approval and move into your new home.
- Keep your financial documents available- Underwriters may request new or additional information so keep them close at hand.
- Save your income documents – the usual paystubs, W2’s and tax returns provided at the time of application may not be sufficient, depending on compensation. Typically, there will be additional verifications done with your employers, CPA and IRS transcripts.
- Check with us regarding gift funds – if you’re receiving gift money from relatives, there are specific rules that must be followed. Many well-intentioned family members have ended up causing problems by simply handing over a check or cash. Underwriters will want to see a signed gift letter confirmed that no repayment of these funds is expected and they’ll need an account statement from the donor to support this.
- Continue to make housing payments on time – If you’re renting, be sure to continue to pay rent on time and keep copies of your cancelled check available. If you’ll be selling your current residence, be sure to have a copy of your HUD-1 Settlement Statement (closing disclosure) available. If you’ll be renting your current home, you may be subject to additional guidelines that require sufficient equity lease, evidence of your first month’s rent and a security deposit to qualify.
- Keep your credit score spotless – keep making any and all payments on time. Your report may need to be pulled again and negative changes to your score from inquires, new debts, late payments, defaults, etc can cause you to jeopardize your loan approval.
- Finally, don’t be afraid to ask questions- if you’re uncertain about what you need to do or steps you should take, we are here to help you through the process and answer any questions – no matter when you intend to buy. Together, we’ll make sure your purchase is as painless and stress free as possible to get you into your new home.
If you have any questions about becoming a loan star applicant, contact me today.