If you are in the process of buying a house and getting a mortgage it is important that you are prepared. Too many people start the process only to realize that they didn't have all of the documentation they needed, or that there is some sort of hang-up, which is delaying them getting into their home. Here are some things you should do prepare yourself for a mortgage:
1. Proof of Your Down Payment
One of the first things you need to do is have proof of your down payment. If you are planning on cashing in stocks to pay for it, the mortgage lender will most likely require that you cash in the stocks and have the cash sitting in the bank before they will approve your loan. Showing them the stocks that you plan on cashing in is not enough.
Additionally, if you are being gifted the down payment you will need to have the person gift you the money and put it in your bank account before you can be approved. They will also need to sign some papers stating that the down payment wasn't a loan, but an actual gift. You will not be able to move forward with the mortgage until you have proof of this.
Another thing you should have ready is at least 2 years worth of taxes. In some cases, you will be able to get away with just 1 year, but the majority of situations will require that you show them two. This way they can see that you have a steady income and will be able to afford the loan. If you are self-employed you may need more proof than just your personal taxes, you may need to bring in your business taxes as well. In addition, if your company had some major loses in the last couple years, you may not even be approved for the loan, and they may make you wait another year.
Lastly, you should expect the bank to want recent appraisals of what the house is worth. This usually is done with the seller, but if the appraisal is credible, you will need to hire your own appraiser and have them come in. If you are getting a construction loan to build a house, then you will need to make sure that you get an appraisal of how much the house is expected to be worth once it is finished.
These are just a couple things you should expect when applying for a home loan. For more information, contact local re-mortgage brokers.