What Information and Documents Are Needed To Apply For Home Mortgage Loan?

If you are applying for a home mortgage loan, a real estate agent will give you a checklist of information and documents to be submitted to start the mortgage loan processing. The checklist will normally contains the following:

1. Personal information on the borrower(s)

1.1. First name, second name and last name

1.2. Social security number

1.3. Driver's license number, if any

1.4. Date of birth

1.5. Home address and length of stay (in years and months). If you are renting, the name, address, and telephone number of the landlord and the copy of the lease

1.6. Mailing address, if different from the home address

1.7. Telephone number

1.8. Fax number, if any

1.9. Email address, if any

2. Regular employment

2.1. Previous 2 months of pay stubs showing year-to-date gross salary

2.2. Employment certification from employer(s) for the last 2 years

2.3. Bank checking and/or savings statements for the last 3 months

2.4. Income tax returns, with supporting income documents (such as IRS Form W-2, IRS Form 1099, etc.) for the last 2 years

3. Self-employment

3.1. Bank checking and/or savings statements for the last 3 months

3.2. Income tax returns, with supporting income documents (such as IRS Form 1099) for the last 2 years

3.3. Profit or Loss Statement for the last 2 years plus the current year

3.4. Recent copy of business permit

4. Personal loans and credit cards

4.1. Copies of different personal loan (example: bank loan, auto loan, student loan) and credit card statements showing the name of creditor, address, telephone number, account number, type of loan, principal balance, interest rate, and monthly payments.

5. Mortgage loans

5.1. Name, address, and telephone number of mortgage lender

5.2. Copy of the mortgage loan or deed of trust

5.3. Name and address of the borrower(s)

5.4. Address and market value of the real estate property

5.5. Recent copy of the mortgage loan statement showing the mortgage principal balance, interest rate, and monthly payment

6. Sources of money for down payment

6.1. From savings, inheritance, gifts from parents/relatives, sale of personal assets, and other sources

7. If you filed for bankruptcy for the last 7 years

7.1. Copy of the bankruptcy petition and court discharge

8. Information on the property you are trying to buy

8.1. Type of home (single home, condominium or townhouse, cooperative apartment)

8.2. Name, address, and telephone number of the property owner

8.3. Selling price for the property

TIPS

1. Verify first your credit score. A mortgage lender will charge you a higher mortgage loan interest rate if you have a low credit score (example: below 750). A lower interest rate may be given to you if you have a higher credit score.

2. Do not pay any upfront application or other fees when you apply for a mortgage loan. If the real estate agent insists on an application fee, you better run and look for another agent.

3. Shop for at least 3 real estate agents and compare the estimated mortgage loan amount and fees.

4. Try to get a free mortgage loan pre-approval from your bank or credit union.

5. If you are ready to buy a home, become a member of a credit union. A credit union usually offers lower mortgage interest rate. In addition, a credit union member receives quarterly dividends on his/her savings account.

IMPORTANT ADVICE: Buy your home which you can afford to pay. According to some financial experts, the monthly payments for your home must NOT EXCEED 35% of your monthly gross income. If your combined monthly gross income is $4,000, you can spend up to $1,400 for your home payments and real estate taxes.

Happy house hunting and good luck!

Come back soon for more interesting articles. Thank you for visiting my blog and God bless you.

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My Experience: Buy First Home Or Rent

My Experience: Buy First Home Or Rent

This is a TRUE story.

Before 1997, I was renting a 2-bedroom apartment and paying $1,100 a month for about 5 years. With the rising apartment rentals, I decided to look for a 3-bedroom single home. The average cost for the single home was $200,000 with a monthly amortization of $1,250.

After studying all my financial resources, options, and real estate situation in 1997, I decided to buy my first brand new 3-bedroom, 2-bathroom attached one-story condominium unit located on the east side of the city. It has a fireplace and a patio. The price was $57,000, I put $3,000 down payment, and my monthly amortization was $525. The association dues was $95 a month.

In 2000 (3 years after), I purchased a second brand new 2-bedroom, 2-bathroom condominium on the second floor of a 2-story building located on the west side of the same city. It has also a fireplace and a patio. The price was $71,000, I put $5,000 down payment, and my amortization was $702. The association dues was $100 a month.

For the 2 condominium units, I was paying $1,227 a month for the mortgage loan principal, interest, and real estate taxes. I was also paying $195 a month for the association dues (to pay for garbage disposal, water, electrical lighting outside my condominium unit, lawn maintenance, painting of building, roof repair, security system, swimming pool maintenance, property management fees, and many others).

So, I was paying $1,422 a month for the 2 condominium units and association dues. My apartment rental was $1,100 a month before 1997.

In 2000, I rented my second condominium unit to a couple with no children and no pets for $1,000 a month. The average rental of apartments surrounding my condominium units was about $1,200 - $1,500 a month.

I was receiving a condominium rental income of $1,000 from my tenant and I was paying my mortgage lender the amount of $802 a month. I net $198 a month. In short, my tenant was paying for my mortgage loan. The excess $198 covered the $5,000 that I paid as down payment. In about 25 months, I was able to fully recover my down payment of $5,000. After that, every $198 was 100% profit.

However, the real estate situation became bad in 2007. Home property values went down. Many employees were laid off. Unemployment was increasing. People who bought homes for personal use or investment, hoping to sell their homes for profit, filed for bankruptcy. Some homes were foreclosed by the mortgage lenders. Some people short-sold their properties.

In 2008, I decided to sell my second condominium unit through a broker. It took 6 months to find a buyer. I was lucky that a buyer bought my condominium unit for $98,000. I received a net profit or capital gains from the sale in the amount of $25,000.

I still live in my first 3-bedroom, 2-bathroom condominium unit and I am maintaining it.

The reason for blogging this story is to share with you that you must be practical in your decision-making to buy a home. Do not become EMOTIONAL, meaning, “I love this BIG beautiful house” when you cannot afford to pay all the cost of home ownership.

Moral lesson: Spend within your income.

Come back soon for more interesting articles. Thank you for visiting my blog and God bless you.

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What Information and Documents Are Needed To Apply For Home Mortgage Loan?