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With good preparation, most things are easier. This is especially true when applying for a Five Towns Long Island mortgage
Here are some ways to pre-prepare to make your Five Towns Long Island mortgage experience easier. You can find a full outline of the mortgage process here
Income Items:
- Gather all your documents. You will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as at least the latest month’s worth of pay stubs for all applicants and co-signers.
- Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
- Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.
Asset Items:
- Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
- You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
- Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
- If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).
Credit Items:
- Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
- Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
- Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.
- DO NOT take on ANY new debt between the time you are preapproved and the time you close on the house.
When buying a home, remember the Boy Scout motto, “Be prepared”. Following these suggestions will make your loan approval easier and less stressful.
You can find a full outline of the mortgage process here
Visit our Long Island Home Buyer page or Download our Guide “What To Consider When Buying A Home”.