So you’ve decided to either purchase a house or perhaps you are preparing to refinance your home so that you can pay off some credit cards or just to take advantage of the amazing rates that are available out there in the wake of the credit crisis that hit just a couple of years ago. There are many things that you need to research on before you decide to pull the trigger and put your name on the dotted line.
You’re going to possibly be a little overwhelmed by the amount of paperwork and information that is required to make this process all come together and get the money to buy or refinance your house. Filling out a mortgage loan application is probably one of the most daunting things that you’ll have to do in your life, however this is probably one of the biggest investments that you’ll make in your life so it kind of makes sense.
Some of the things that you’re going to have to dig up for your mortgage loan application and probably the most difficult are two to three years of tax returns. In a world where we live on computers, using them for most of our daily activities, some of you will find them stored on your computer in perfect order. Still others will have to dig through filing cabinets or kitchen drawers trying to find the taxes they paid over the past few years.
This is key to the lender to determine how much money you’ve been making over the past few years so they can make a judgment about your future earning potential and how likely you will be to afford the mortgage you’re seeking and continually make payments on it.
Assets and liabilities will be something else they want to take a look at. This is one of the hardest things to do as you’re required to take full stock of your household estate and determine what you have that you truly own as opposed to what you owe. Your assets can be stocks that you’ve gotten from your job, or your savings that you’ve got in your 401K (if they’ve got one where you work) and your regular savings that you may have in a money market fund or something.
In addition to that you’re going to have verification of employment, often back for a few years to determine that you can hold down a job for an extended period of time. This is a huge one for lenders because without a stable work history your mortgage loan application can very well get turned down on this basis.
While this covers most of the things you’ll need to be aware of throughout your home buying process, there are many more that you’ll need to consider. There are plenty of samples online of applications that you can download and start getting all of your information together to make the process go as smoothly as possible.
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