How to Get a Home Loan or Mortgage

To obtain a home loan, be prepared to show full documentation on everything, and be prepared to show excellent credit. While FHA and VA loans are still available, everything changed in 2007 – 2008 because documentation was either minimal or lacking, and because there was a mistaken belief that property values would climb endlessly.

Today, appraisals are still used, but comparative values are showing what we all know: foreclosures rule the price in many home markets and very often, lenders holding properties will sell them quickly rather than incur further losses. These lender-held properties do provide a better opportunity, so consider them first. Let a qualified realtor guide you.

Here is what to expect today:

First, bring a decent down-payment which is not borrowed from anyone (if a gift, bring a notarized “gift letter”). It would be best to consider 20% down to help cover loan costs and fees and to buy-into the home equity! Bring what you can by saving for it!

The 1003 (ten-oh-three) form is the loan application. It must be completed in total, and it is a long form. Be truthful! Padding income or hiding debt won’t work. Self-employed people, seasonal employees, and those with poor credit will have to prove income and demonstrate a solid ability to pay. Most lending guidelines suggest the payment amount must be no more than 25 to 33 percent of the total monthly income. Those rules depend on the loan type, and may change based on your personal situation.

Bring recent paycheck stubs, two years of income tax returns, including the W2’s, bank, IRA, 401K, credit card, and all installment loan statements. Those employed in their jobs for two years or less will be scrutinized more closely. Employment and deposits will be verified in writing, independently, by the underwriters.

Bring “poor credit explanation” letters. Explain long gaps in employment. A full credit report will show all your past mistakes (7 to 10 years…or more), so don’t think you can hide anything. Criminal history also will be a negative. Explain every potential negative in writing before coming-in for a loan. Bring all “loan recommendation” letters, too.

If you can be “pre-qualified,” this makes home-hunting easier. Find property in an area that accommodates a short commute to work. Find property that fits your and your family’s lifestyle. Don’t over-buy, because your loan won’t happen.

Those heavily in-debt via credit cards will find limited choices for real estate financing, if any. Those with good history of installment debt payments will find easier approval.

The process is complex, but it is common-sense. What you say must be independently provable, so be honest, patient, and prepared. Apply for a loan that benefits the person with less installments amount and premium. Get a loan in 60 minutes! The scheme is provided through different financial institutions for urgent requirement. The procedure of obtaining amount will be simple and easy to understand. Proper research can be made at online sites for further information. 

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James Scott is a general news and feature writer of Untitled Magazine. Prior joining the company, he previously worked as a senior writer in different publishing companies in New York.