Obtaining a pre-approval letter and consulting with a Mortgage Lender in Wetumpka, Alabama provides several benefits to potential buyers. The lender gives them the opportunity to talk about loan options and budgeting. Secondly, the best and most trusted mortgage lender will review the buyer’s credit report and search for any problems. In addition to learning the maximum amount the buyer can borrow, it is better to know the range of prices. Budgeting costs is easy with a mortgage calculator.
You’ll need five things to get pre-approved for a mortgage: proof of assets and income, good credit, employment verification, and other documentation your lender may require. The following information will help you prepare for the pre-approval process and ensure you are ready to submit everything you need:
As a general rule, buyers must provide the two most recent years’ tax returns, W-2 wage statements from the past two years, a recent pay stub showing income for the year, and any additional income, such as alimony.
To demonstrate cash reserves and funds for the down payment and closing costs, the borrower needs to provide bank and investment account statements.
Down payments vary by loan type and are expressed as a percentage of the sale price. Private mortgage insurance (PMI), mortgage insurance premiums, and funding fees are commonly required for most loans unless the buyers put 20% down.
According to the type of loan, pre-approval is also based on the buyer’s FICO credit score, debt-to-income ratio (DTI), and other factors, such as down payment. Rest you can anytime take the required knowledge from our Mortgage Brokers in Wetumpka.
Except for jumbo loans, all government-sponsored enterprises (Fannie Mae and Freddie Mac) follow the same guidelines. Loans designed for first-time buyers and low- to moderate-income homebuyers include Home Ready (Fannie Mae) and Home Possible (Freddie Mac).
U.S. Veterans, service members, and not-remarried spouses are eligible for VA loans, which require no money down. It may be necessary for a buyer who receives money from a friend or relative to provide a gift letter to prove that the funds are not a loan.
FHA guidelines allow approved borrowers with a score of 580 or higher to pay as little as 3.5% down on a conventional loan. Some top lenders even require a FICO score of 620 for a Federal Housing Administration loan. The down payment for those with lower credit scores is higher. Borrowers with low or moderate credit ratings will often be offered advice on how to improve their scores by Mortgage Brokers in Alabama.
Borrowers with steady employment are more likely to be approved for loans by lenders. Additionally, lenders will likely call an employer to verify a buyer’s employment and salary in addition to looking at pay stubs. The lender may wish to contact the buyer’s former employer if he or she recently changed jobs.
It will be necessary to provide significant documentation concerning the business and income of self-employed buyers.
A number of factors are considered by Mortgage Lenders in Alabama, when approving a mortgage for a self-employed borrower, including the borrower’s income stability, the borrower’s business location and nature, the market for the product or service offered by the business, its financial strength, and whether the business will continue to generate and distribute sufficient income to enable the borrower to make mortgage payments.
Self-employed borrowers must submit their two most recent tax returns, complete with all schedules.
Borrowers must provide their driver’s license and Social Security number to lenders so that lenders can pull their credit history. You will have to provide additional paperwork (as soon as possible) to the lender during the pre-approval session.
In a Nutshell
Before buying a home, it’s a good idea to consult trusted and expert mortgage lenders in Wetumpka. Always do your research before going house hunting and before the pre-approval appointment.
With 50 years of experience in the industry, PierPoint Mortgage is offering the finest mortgage services. We deal in various mortgage programs that will help you become a proud homeowner.