Applying for a Mortgage
Applying for a mortgage
loan can be one of the most important financial decisions of your life. To ensure
that your home buying experience is as seamless as possible, KNOWAtlanta has
compiled some helpful advice for a successful application process. Happy homebuying!
Your Home Loan Application Checklist
Verification of
Income:
- Tax Returns & W2s
(from the past two-three years)
- Current Pay Statements
(two most recent months)
- Residency and Employer
Addresses (from the past two years)
Additional income:
- Current Award Letters/Certificates
of Eligibility (social security, veteran’s benefits, interest income
and rents received)
Alternative Documentation:
- Bank Statements (12 consecutive
months)
- Cancelled rent checks,
utilities and other proof of recurring financial obligations (in lieu of an
established credit history)
- Verification of Assets:
- Bank account numbers
and branch addresses
- List of all investments
(savings bonds, stocks, 401(k) and their market value
Verification of
Debts:
- Other debts not noted
on your credit report (car loans, furniture loans, student loans, personal
loans, cosigned installment loans, creditor addresses and phone numbers)
- Other Mortgage Statements
(account numbers, customer service phone numbers, balances, monthly payments,
creditor addresses and signed copies of sales contracts)
- Child Support or Alimony
payment documentation
- Credit cards (monthly
payments and balances)
- Bankruptcy Papers or
Divorce Decrees (if applicable)Homebuying Hang-ups Caused by Bad Credit
Inability to get a loan, higher interest rates, larger down payment
What You Need to
Qualify for a Home Loan
- Enough money for the
down payment (3 to 20 percent of the purchase price)
- Two years of steady employment
(same job or field)
- Good (not perfect) credit
score
- Income two to three times
higher than expected mortgage payment
Increases Homebuying
Power
No debt, large down payment,
good credit, duplexes with rental income
Decreases Homebuying
Power
Big debt, small down payment,
bad credit, single-family homes with no rental rooms
Homebuying Costs
Upfront Costs:
- Down Payment: 3 to 20
percent of the home’s purchase price
- Closing Costs: 1 to 8
percent of the purchase price
- Miscellaneous Costs:
$250 to $800 for loan application fees, credit report fees, professional home
inspections and appraisal costs
Monthly Costs:
- Mortgage Payment: No
more than a half or third of your monthly income (including taxes and insurance)