As you may have already heard, guidelines will be undergoing some more changes in the New Year. Some of the changes may make it more difficult in obtaining a mortgage so you need to be prepared. If you are looking to purchase a home this coming year, you should start preparing and getting your financials in order at least 6 mo. to a year prior to purchasing, if possible. I’ve listed below are few areas of communication that cannot be left out. These are situations that need to be disclosed up front and should ideally be discussed prior to going under contract on a home.
- Bankruptcy: You need to know the date it was discharged and you will need to gather all documents regarding your bankruptcy, which includes all court documents.
- Foreclosure and/or short sale: Must disclose date of foreclosure and be prepared to disclose all foreclosure documents
- Student Loans: You will need to have current or have paperwork documenting your payment schedule if you are in deferment or forbearance (can get this from student loan servicer), be prepared that your lender may also need to document that your payments are current.
- Funds for down payment: This is better to discuss this early in the process because there are strict guidelines regarding sourcing funds for down payment especially if getting gift funds. Your lender can help you prepare for what documents will be needed to provide and to properly source the funds.
- Co-Signer: If you are a co-signer on a loan it is helpful to know this beforehand so your lender can see if this will be something that may need to be addressed and if you should require any documentation from the loan.
Again, this is just a list of the most common areas that can cause problems. If they are not disclosed to your lender, in the beginning, they will show up during your loan processing and underwriting and could cause a delay and/or a decline in your loan approval. It is better to prepare yourself and make sure you have all your ducks in a row before you put an offer on a home.
If you are unsure about anything that may be of concern for loan application and/or approval, make sure to ask your lender. There are no “stupid” questions when looking to get approved for a mortgage. This is probably the biggest financial decision you will make in your lifetime so make sure you educate yourself and ask many questions. You want to feel secure and safe knowing that you are working with someone you trust.
If you have any questions, you are always welcome to contact us. We are here to help in any way we can.