When we're ready to make an offer on a property, a pre-approval letter from a mortgage lender must accompany it. Therefore, it is important to start this process first, even before looking at properties. A second benefit is that the buyer will know beforehand exactly what they're qualified to buy, what issues might need to be addressed, what items will be needed when applying for the loan, etc.
The loan officer will give you a Good Faith Estimate of your closing costs involved with the financing. There are recurring costs you pay as part of your monthly mortgage payment including homeowners' insurance and property taxes (the monthly payment consists of Principal, Interest, Taxes and Insurance). There are one-time closing fees that you pay such as the appraisal fee, points (the more points, the lower the interest rate), credit report fee, underwriting fee, attorney's fee, title insurance. survey deletion fee and further one-time closing costs.
Wouldn't it be nice to deduct some of these costs at tax time? It can be done...see Realty Times Article, "What's Your Principal Residence? Tax Experts Not Always Certain" and Realty Times Article, "Tax Issues: More Complicated This Year." And, Always remember to ask your Tax Advisor.
Loan documents needed upon application:
1. W2 Employees Borrowers:
· Last
2 years of W-2's
· 1 Month Recent Pay Stubs
Self-Employed Borrowers:
· Two
years tax returns and K1 (Personal and Business)
· 2 year's complete and signed
1040's
· YTD Profit and Loss statement.
2. Liquid Assets (Checking, Savings, and Investment Accounts)
· 3
Months Bank Statements for all accounts
(Please ensure that all pages are
included)
· Please provide statements for:
401K, Profit Sharing, Stocks, Bonds etc.
3. Property Owners:
· If
you own rental property, please provide rental agreements and
two years tax returns.
· Mortgage statement for all
property owned
