Should you get pre-qualified or better yet a “Verified Pre-Qualification” by a lender? While idly shopping for a home may be pleasant, serious homebuyers need to start the process determining how much they can afford to spend, not an open house. Potential buyers benefit in several ways by consulting with a lender (Commonwealth Mortgage, LLC) and obtaining a verified pre-approval letter. First, they have an opportunity to discuss loan options and budgeting. Second, Commonwealth will check on their credit and alert the would-be buyers to any problems. Third, the buyers learn the maximum they can borrow and therefore have an idea of their price range. Lastly, home sellers expect all buyers to have a pre-approval letter and are more willing to negotiate with people who have proof that they can obtain financing. In addition, when buyers present a pre-qualification letter with an offer, real estate agents will often call Commonwealth to make sure that the buyer’s Income and Assets have been verified.
1. Proof of Income
“No verification” or “no documentation” loans are a thing of the past, so all borrowers need to be prepared with W-2 statements from the past two years, recent pay stubs that show income as well as year-to-date income, proof of any additional income if you want to use it, and if you’re self-employed, your two most recent years of tax returns.
2. Proof of Assets
You will need to present bank statements and/or investment account statements to prove that you have funds for the down payment and closing costs, as well as cash reserves. An FHA loan requires a down payment of as low as 3.5% of the cost of the home, while conventional home loans require 3% to 20%, depending on the loan program. If you receive money from a friend or relative to assist with the down payment, you will need a gift letter to prove that the funds are not a loan.
Commonwealth is a direct mortgage lender closing loans in its own name with its own funds. There is no middle-man involved (mortgage broker) and loan decisions are made locally here in our Woburn office. Commonwealth has closed billions in mortgage loans since 2000 and is known has having amongst the lowest rates and costs in the industry. If you would like a Verified Pre-Qualification letter, please complete our online application and I’ll get working for you right away! Click Here