There is so much to consider when preparing to purchase a home. If you’ve never done it before the whole process can be daunting. Here at Sage & Cedar, “educate” is our middle name. So let’s take a look at 4 items you’ll need to collect before applying for a home loan.
Let’s take a look at the 4 items you’ll need to collect before applying for a home loan.
01. Proof of Income – Lenders want to see that you have the ability to pay for the home after closing. Because of this they will ask you to provide proof of income. This will consist of 2 years of tax returns and your latest w-2’s. Lenders do not require you to be at the same job for 2 years, but they will want to see consistent income, ideally in the same field.
02. Proof of Assets – Supplying the lender with proof of assets help the lender decide the type of mortgages you qualify for and sometimes even the interest rate you receive. Most common assets include cash, physical assets (like cars, boats, homes), and liquid assets (like 401ks, stocks, bonds). Supplying proof of all assets will help the lender qualify you for a higher loan amount than they’d be able to without proof. Still have questions on what to include? Consult your CPA!
While the bank *may* ask you for more documentation, these are the core 4 items you need to get started!
03. Good Credit – Most loans have a minimum credit score requirement to qualify. Having a good credit score suggests that you have no problem making payments on time. Usually, the better your credit – the better your interest rate. The most common loan requirements are as follows: Conventional – 620, FHA – 500, VA – 640, and USDA – 640.
04. Employment Verification – Your lender will require verification of employment to issue a pre approval letter and again right before closing. These documents can include an employment verification letter, a recent pay stub, or anything else to prove an employment history and confirm income.
Interested in starting your home buying journey? Click here to connect with a Sage & Cedar agent and set up a one on one buyer education meeting!