Prepare to Refinance or Purchase Real Estate at Low Mortgage Rates
Mortgage rates continue to maintain low levels and the second half of 2011 mortgage happen to drop very close to the low levels from 2010. Buying or Refinancing a home at the lowest rate possible saves on interest and also increases your purchase power. Simple fact: Did you know that a ½% change in interest rates is equal to a 5% change in the sales price of a home? 30 year fixed average rate is above 6% and we are currently around 2% points below increasing your purchase power by 20%. How can you pass this up!
Now the question is how do you prepare? Glad you are here to allow the Mortgage Reel to provide this information and if you are located in Washington State, we can assist you with the financial process.
To ease the qualifying process you want to make sure you know the following:
*Down payment – Depending on your purchase price the loan structure will vary the amount required.
*Credit Score – Your credit score will help determine your rate and home loan options. If you do not have an idea of your credit score, we can assist with that or your lender will be able to
*Debt – Have a detailed idea of your monthly liabilities such as your credit card payments.
Example: If you have a balance of $500 on your credit card and your minimum payment is $25. You must provide the minimum payment $25.
*Income – Are you self-employed? If you are self-employed you must provide 2 years of income (tax return) history to show stable income and the average.
If you are a W2 employee, you must provide paystubs (month) and your latest W2 and tax return. For qualifying you want to show a consistent 2 year working history in the same industry. Please contact us for further possible exceptions.
If your income is based on commission or overtime or bonuses, underwriting would like to see a 2 year history as well. These three sources of income can easily be verified with a verification of employment to clearly show your income breakdown for 2 years.
*Own multiple properties? If you have an existing property with less than 30% equity you will not be able to use rental income for qualifying. If you currently have 2 years of rental history on taxes or more than 30% equity you would be able to use rental income. This is very important to meet qualifying guidelines.
The most important step is making sure you are working with a local professional who you are comfortable working with. Washington State loan originators are licensed annually so you can verify they are an active licensed loan originator here. Make sure you do not pay any fees upfront such as an application fee. For example: Big banks may charge an application fee to receive a pre-approval but the upfront fee is easily avoidable. Please feel free to contact us with any questions about any of the details above.
Along with a loan application you can find here, below is the basic required documents (all pages even if blank):
1 month of paystubs
2 months of bank statements
Last 2 years W2’s
Last 2 years of tax returns
Current 401k, stock, bonds statement
Thanks for the continued support and we look forward to assisting you!