Prepare For Loan Application

Posted on 12月 16, 2019 by Nancy Liu | Category: Real Estate

Prepare for your Mortgage Application

When you are getting your dream house, other than looking for the appropriate location, satisfactory architecture, and a desirable community, the more important thing is to ensure you have the mean to purchase your dream home.  That means to have your loan application approved smoothly if you are acquiring a loan.

          In order to get your loan application approved, you should analyze your financial situation before prepare to purchase a property. The Lender would look for the following criteria when you apply for a loan:

  • Whether you have a stable employment for two years or more.  It is best if you worked for the same employer during the past two years, which eliminates the possibility of you losing your job.
  • If you keep a steady or growing income. 
  • Whether there is any bad record in your credit history that indicates you had some discrepancy or pass due accounts.  Limit your late or past due records to be twice or less, and the past due period not over 30 days. 
  • Have you ever filed bankruptcy?  If you filed chapter 7, it needs two years for your credit to be reestablished.  It’s best for you to leave a gap of two years more between the time bankruptcy was filed and the new loan application.
  • If the house you previously lived in was foreclosed due to default in payment, there should be at least three years between the foreclosure and the new loan application, and there is no bad credit record after the foreclosure.

If you can meet the above requirements, you can gather all your materials and give to your mortgage broker to process.  For the first time home buyer, Lender usually request for one to three months’ of your bank statement, last three years Income Tax returns (Form 1040), W2 forms for the recent three months or the employment verification letter, information on your debt, and the detailed information of all creditors, including your credit card,  auto loans, student loans, credit card, etc..  Some banks also require you to give proof that you had paid your rents on time, such as the voided check or payment receipt, etc.

  There are two important points that are often ignored by the borrower in the loan application process. First, borrowers often don’t understand the importance of credit report. You should pull your credit report once a year, just like having your annual physical exam.  Under Georgia Law, the credit report company should provide the free credit report services to the Georgia residents once a year. You can request your free credit report from these three major credit report companies: www.equifax.com, www.experian.com and www.transunion.com. Second, the Lender will verify information provided in your loan application.  If the Lender finds mistakes in the materials provided by Borrower, even careless mistakes, Borrower’s credit will be affected. The most comment mistake caused by changing employment during processing loan application, because Lender will verify your employment before closing.  Therefore, if you change job after submitting your loan application, you should inform your mortgage broker or your Lender right away to avoid your loan being rejected because your previous employer refused to give verification of employment.

This article is only for your reference. Please do not apply mechanically to any exact cases. You are welcome to consult our attorneys at Liu & Associates, P.C. For contact information, please click here.