I have a good friend that has been considering home ownership for two years now. She is smart, hard-working and well-established in Albuquerque. She has a good job. She knows roughly where she wants to live. She has been pinning away furniture and paint ideas daily. But she has a deep underlying fear of meeting with a mortgage lender. She comes from a family that is very tight-lipped about finances. Because of this, she fears being made to look unprepared and in her mind this equates to foolishness. Her story is not that different from many people but I encourage her–as I encourage all buyers– to meet with a lender as soon as you begin to consider purchasing a new house. Meeting with the lender is actually a very empowering experience. After she meets with the lender she will know how much of a mortgage payment can comfortably afford and she will be that much closer to having her own home and not to mention, the tax benefits! To ease her mind and those of people like her, I drafted a list of items the lender will request:
- Residence history for the past two years (length of time at each address and landlord contact information for the last 12 months)
- Employment history for the past two years (name, address, phone number for each employer, length of time at each place of employment, income earned. Explanations for any gap in employment).
- Outstanding debt (name and address for each institution, account number and balance)
- Real Estate owned (address, loan balance, estimated market value, monthly payment including taxes and insurance, expenses (HOA), rental income if applicable.
- Personal property information (make and model of vehicles, loan balance, market value, net cash value of life insurance)
Also, good lenders want to help their customers. Most know that unless you do what they do every day, you are probably seeking some education and clarification on the loan process. For those of you who have already bought and sold several homes in your life, the loan process may seem like old hat– but this industry changes constantly so do not be frustrated if you need a refresher. This is a great time to ask a lot of questions!