By Kip Reynolds
Lending in the United States is happening, but it’s not the easiest process and can be very invasive, stressful, and often exhausting.
Any Realtor worth their salt should always ask you if you have your pre-qualification(s) or pre-approval letter. Don’t be surprised if a professional agent declines showing you property until you have this letter in hand. Be grateful you’ve aligned yourself with an experienced leader. To acquire this letter, you will need to submit a minor amount of information, so the lender can get a general sense of your ability to repay the sum you require. A good lender will help you to understand the fundamental difference between what you can afford and what you should afford. They will clearly share the terms of the mortgages available to you for your situation.
The proof is in the pudding, so be prepared for the standard repeated requests for information. In addition to things like valid identification, some general information needed will be:
- Pay stubs for the last 30 days
- Last two federal tax returns
- Last two W-2s
- Proof of any additional income
- Last two statements on all bank accounts
- Statements for all investment and/or retirement accounts
- Settlement statement from previous home sale, if applicable
Bear in mind that the above is very general. Some loan programs have specific requirements. For example, if you are a veteran you will need to provide your certificate of eligibility in addition to other specialized pieces of information.
The lender will collect all documents, review, and provide another list of requested documents. Often the lender will request the same document many times. The best way to handle this little joy of lending is to be extremely organized. Use the cloud to safely store these documents with clear file names so that you can easily answer any request quickly without too much anxiety. Letters of Explanation (LOE), often required to “source” funds, are another slightly invasive demand, but necessary and standard practice, if you want to acquire a mortgage.
A good realtor will coach you well in advance so you are prepared for these requests and requirements. Having someone in your corner that will help you understand the lay of the land will minimize many of the hurdles in the home buying process.
Kip Reynolds, PA CRS
Coldwell Banker Realty
901 E Las Olas Blvd., Ft Lauderdale
Direct: 954-854-3048 | kipreynolds.com