Preparing for a loan consultation

Download my Handy Prequalification Check List of questions

Q? Why do we ask so many questions and require so many documents? Answer: We are determining risk and which loan program(s) we can offer you. We have to navigate a multitude of investor guidelines and lender overlays per your answers and information.

What is the difference between a Prequalification & a Preapproval

Prequalification

Preapproval

The initial conversation without a credit pull or documented proof

We collect information on your current financial status & future goals

We calculate your income based on your answers

We calculate your debt based on your answers

We estimate the taxes and proposed interest rate based on the conversation. We work backwards and forwards to calculate approximately how much house you can afford and the monthly payment.

1) Initial conversation and filled in all the gaps in information, the goals, the current situation etc.

2) Pull your credit, analyze score and report thoroughly

3) All documents have been provided, reviewed and organized

4) The file has been run through FNMA & FMNC systems

5) We know the loan products to recommend

6) The underwriter reviewed the entire loan file and preapproved with conditions. *conditions are homework assignments.

Keep in mind, the interest rate, taxes, insurance & closing costs are all estimates at this point. As you are shopping and rates rise or fall your preapproval can be effected. A good loan officer is reviewing and watching this for you.

Common Documents Needed

Remember 2-2-2-1. The golden rule is 2 year residency, 2 years W-2s, 2 months Bank Statements & 1 month Pay Stubs

• Bank Statements (PDF/electronic!) where the down payment is held

• W-2's

• Pay Stubs

• Independent Contractor - 1099, 1040's Schedule C

• Sole Proprietor - 1040s Schedule C

• Partnership - 1040s, 1065, Schedule K-1

• S-Corp - 1040s, 1120S, Schedule K-1

• C-Corp - 1040s, 1120, Articles of Incorporation

• Rental Income - 1040s Schedule E

• Commission - Year End pay stubs.

• Retirement/Pension - Award letter or 1040s

• Social Security or Disability - Award letter or 1040s

• Alimony or Child Support - Court Divorce Decree & bank statements

Once we talk and review, we determine if we need anything additional for your specific case.

Helpful tips

Credit - YES! We have to do a hard credit pull. We use the scores and the report to qualify. NO! We will not pull your credit without your explicit permission (it is illegal). Once we pull credit, your score will drop 3 - 7 points the following month and should pop back up a month later as long as you are paying bills on time. The CFPB requires the credit bureaus can only count 1 mortgage credit pull in a 45 day window. The credit pull will expire / time out after 120 days. FICO scores are different from Vantage scoring system used by Credit Karma and Banks tracking credit monthly. These scores are for tracking improvement and watching for identity theft.

If you are thinking about buying a house, even a year down the road, it is a wise idea to have a loan officer look at your file fully. We often find things that need to be fixed which can take time. A good loan officer is typically good at giving credit score guidance and helping to resolve the issues that could be major road blocks. We want you to get into home ownership!

Bank accounts / statements - PDF/electronic statements are best.

1) To save a document as a PDF, act as if you are going to print the document, there will be a "print to PDF" option to choose instead of the printer. 2) All bank apps have a way to download the statements which will be in pdf format. 3) If you have paper copies, you can download a free scanner app. I use the free version of Genius Scan which works awesome. ***Make sure to send every page even if it is blank.

Taxes/1099/W-2s - If you cannot find these items, you can retrieve them from the IRS by creating an ID.me account. The ID.me takes about 10+ min and does require face scans and authentications.

Helpful Home Loan Links

To pull your own free credit report - Annual Credit Report

CFPB - Buying a home & checking your credit

Prior to pulling your credit, is a good idea to Opt Out

Common Credit report Q&A

“A house is made of bricks and beams. A home is made of hopes and dreams.”

– Unknown