So you’ve decided that it’s time to buy a house. Congratulations! At Avrus Financial and Mortgage, it’s our mission to help you get the financing you need for the house of your dreams.
But before you start inviting people over for a housewarming, there are a few basics we need to cover.
The Three Cs
Mortgage lenders look at something called the “three Cs” of credit when determining whether or not to give you a mortgage loan. What are the three Cs?
- Credit history is shown as a number; a score of 660 or better will be helpful (take a look at our blog post on getting a mortgage with low credit scores).
- Capacity refers to both the depth and the continuity of your resources.
- Collateral is the value of the property you are purchasing or refinancing, along with your down-payment or the equity that you’ve built.
Document, document, document!
What we’ll ask you, and what every lender will ask you, is for documentation of everything having to do with your financial situation: your credit, your income, your resources. The more documentation you have, the better your chances are. What kind of documentation will you need?
- 1099 and 1040 income tax returns
- profit-and-loss statements if you’re self-employed
- earnings statements (W-2 forms, recent pay stubs and tax returns for the past two years)
- additional income (social security, overtime bonus, commission, interest income, veteran’s benefits, etc.)
- copies to titles of motor vehicles and recreational vehicles that are already paid for
- credit-card bills for the past few billing periods; other consumer debt (such as car loans, furniture loans, student loans, etc.)
- evidence of mortgage and/or rental payments
- copies of alimony or child support payments
- a list of bank and brokerage account numbers, and the address of your bank branch.
Prequalify or preapprove?
You should always get mortgage preapproval before even talking to your real estate agent! What’s the difference between preapproval and prequalification?
- Prequalification means that you’ve had an extensive conversation with a mortgage professional and offers the opinion that you could qualify for a certain mortgage amount.
- Preapproval means that an offer of a loan in a determined amount has been made. You generally have 60 days to take advantage of your preapproval.
At Avrus Financial and Mortgage, we know that an educated client is the best client. Having all of your information available and understanding the process will enable us to facilitate your application and find the perfect fit for you. If you’re interested in buying property in California, Florida, or Georgia, we can help you.
Why not ask us how… today?
