Several Things You Need to Prepare for Real Estate Mortgages
Apart from the credit score and other qualifications that you must meet to finance the real estate mortgage loan, you need to have the papers and documents. You can certainly speed up financing and make the life easier. You should organize the papers into three-ring binder or file system. Also, you don’t need all the documentations listed below. But, when you are able to gather more information, then you can get the most excellent loan rates. You have to remember that all of these documents may not be required for all kinds of loans.
When you like to purchase your first house or other investment properties to build wealth, then this is the checklist that can surely help you save money on the costs of the loan. One is the proof of income. You should add copies of the last two pay stubs or other proof of employment as well as income verification. When you are receiving fixed income just like the trust income or the social security, then you should add a beneficiary letter that states how much you are getting. For one who is self-employed, you need to prove that you have been in the same business or line of work for two years or more.
If you are self-employed, then you should show a copy of the business license for up to three years to be able to show that you are in such business for the last couple of years. If you don’t have such, then you should do whatever evidence you have that you are in this business for at least two years. You may also ask a CPA to have the income tax returns amended for the past 2 years and also write a letter that verifies that you have been self-employed for at least a couple of years.
Also, you should provide tax returns for the last two years or at least a couple of years of W2’s and/or 1099s if you don’t like to disclose tax returns. If you are self-employed, then the mortgage company may require personal and also business tax returns for the past couple of years and also the company’s year-to-date profit and loss statement. When you have a business, you may require financial business statement prepared by the accountant.
The bank account records are also required. You must gather the account numbers, the address of the bank branch, and the checking and savings account statements for the past 2 to 12 months. In so many cases, you may need the last two month’s bank statements. So many of the lenders will just need 12 months bank statements when you try to get a full doc loan with the best rates instead of the stated income for the self-employed individuals. Also, you must talk to the loan officer when the 12-month bank statements are going to help you obtain better rates.