Prepare Your Assets to Get the Best Deal on Your Mortgage
Looking for your dream home is a thrilling time of life. After you find your ideal home, you’ll need to get approved for a mortgage. To navigate the challenges that may frustrate you if you ‘re not prepared, organize your assets so you can secure a good deal on a mortgage. Ideally, you should prepare your finances at least three months ahead of time to increase your chances of approval. If you’re just in the search process, start now to get your assets together. That way, when the time comes to buy, you’ll be ready.
Have Two Months’ Bank Statements Ready
You may want to create a file folder to hold all of the information. First of all, make copies of the most recent two months’ bank statements. Include both savings and checking. Lenders want to see a consistent history of deposits, not a huge lump sum deposit when you get ready to buy. A large deposit may mean that the money was a gift. Lenders want to see that you’re earning the money yourself. They want to know that you can keep paying on the loan after you receive it. Keep the same bank account. If you switch accounts, it may look as if you have made a large deposit from the amount transferred. If you have to transfer a large sum of money for an estimated down payment, transfer the funds three months ahead of your need.
Ask Your Employer for an Income Verification
Proof of a steady income is how you prove to your lenders that you can pay on your loan for the long term. If you plan to change jobs, wait until you have secured your loan before you do. If you’ve been with your current employer less than a year before applying for a mortgage, provide your former employer’s contact information so the lender can verify your income on that job as well.
Self-employed people need to provide the lender tax returns that document their income. Have three years’ worth of tax returns available for the lender to look over. Some lenders may ask you for a letter written by a CPA to verify your income
Other Assets May Be Considered
Include titles or other proof of ownership of other significant assets. As for real estate, unless the co-owner of the property is also applying for the mortgage, you must be the only owner. Assets may include the following items:
Investment accounts
Life insurance policies
Boats, vehicles, jewelry, and antiques
Real estate holdings
Don’t make any changes to your financial status until you have closed on the home. Lenders often double-check on your situation just before you close. For more information about applying for a mortgage, contact your local mortgage professionals.
