Mortgage Preparation

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Preparation Greatly Reduces Stress and Anxiety

For most people, purchasing a home is the largest financial decision they will ever make. So, it is no wonder that many prospective homeowners are very worried about getting through the mortgage application process. One thing people can do to significantly reduce the stress of the mortgage application process is to get all of the paperwork and required documentation in order before beginning the transaction. Even if you are just looking for now and thinking about buying a home, it is good to be aware of the process and be aware of the requirements. When you find your dream home, you can avoid lengthy delays.

Take the time to Get Your Paperwork Organized

One thing you can do right away is to get your tax paperwork and your paycheck stubs organized. One strategy is to simply start a file for important records like these. When you need the documents, you will know exactly where they are. If you have misplaced or lost important information, you will have ample time to discover missing documents and sometimes replace important papers. A common requirement that lenders ask for are two years of W2s. If you work for yourself, you may be asked to show two years worth of tax returns. Small business owners may be asked to provide copies of client or customer payments.

The next thing that your lender will ask you for is copy of documentation regarding your assets. Consider assets anything that has a cash value. Examples of common assets are checking and savings accounts, stocks, bonds, 401Ks, IRAs, and some insurance policies. The best thing you can do is set aside the most recent statements from your bank accounts and any other accounts that you may have. Be sure to have at least two months worth of bank statements. For other types of accounts, most lenders will be satisfied with a recent quarterly statement.

Get your Credit History in Order

Many new home buyers have credit issues that need to be addressed when applying for a mortgage. If you have had a bankruptcy in the last few years, make sure you bring a copy of your discharge paperwork when you go to fill out your mortgage application. Also, if you have settled other debts, bring this paperwork as well so that you can show your lender that some of the negative items have been cleared up. If you are not sure what credit-related documents you should bring to your mortgage application appointment, ask your lender. It may even pay to run your own credit check to see if there are issues that can be taken care of before you begin the process, this saves time and may help you look better to the lender.

Documentation and Identification are Paramount

Other types of paperwork that can be important in the mortgage application process include proof of identification and all income. Bring picture ID and your Social Security card. If you are divorced and plan to include child support as part of your income, you'll want to bring a copy of the divorce decree with you to the mortgage application appointment with your lender. If you are uncertain about anything in the process, make sure you speak up and ask your lender any question or concerns that you have. Remember that even though the mortgage application process is not an easy one, it will be well worth it when your new address is not just another rental, but that of your own home.

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