Mortgage Loan Checklist
Are you ready to buy a home? This can be a difficult question to answer. First-time homebuyers might be in a good spot in their personal life to purchase property, but a bad financial spot or vice versa. To help you make this life-changing decision, we have created a checklist to determine if you are in fact prepared to buy a house.
- You Can Commit to One Location
When applying for a mortgage, it makes the most sense to be committed to a location. If you may be packing up two years down the road, it is probably smarter to rent property. The general rule of thumb is that a first-time homebuyer who will stay in the same place for more than five years should apply for homeownership.
- You’ve Reviewed Your Credit
Do you know your credit score? Many people are unsure or fail to monitor this critical number. Based on your financial history, a “good” credit score is above 700 (out of 850). If your number is well below that, you may have some work to do before being approved for a mortgage. Lower your high interest debt and be able to show you have a steady income.
- You Have Researched Loans
You know that your dream home must have a master bedroom, two full baths and an attached garage, but do you know the type of mortgage loan that’s best for you? Before speaking with a lender and applying for a mortgage, it is important to be knowledgeable of the options that are best for you. Whether this is based on longevity, monthly payment or the down payment you can afford will depend on your unique financial situation.
- Money Is Saved for Costs
Many first-time buyers are unaware of the other costs associated with a new home. These include closing costs like appraisal fees, title insurance, loan origination fees – and the down payment. If you do not have sufficient funds to cover these costs, make a decent down payment and still have an emergency fund left over, consider waiting to buy your new home.
- You Can Provide Documentation
When you decide to buy a home, one of the first steps in this process is your mortgage loan application. What documents do you need to provide the lender? They include, but are not limited to the following materials:
- Social Security Number
- W2s from the past two years
- Paystubs from the last 30 days
- Previous three months of bank statements
- Two to three years of tax returns
- Other loan information (i.e. auto or student)
At Ion Bank, we have a great team of mortgage loan originators to help you purchase your first home. Contact us today to learn more about your options!
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