Buyers still think that they need 20% down payment to qualify for conventional loan… Not true. Many lenders these days offer loans for borrowers who put only 5% down. This situation usually involves mortgage insurance, but if your FICO score is 680 or higher there may be possibility of avoiding PMI by paying a one time fee or getting slightly higher interest rate.
How to qualify for a mortgage…
Getting pre-qualified for a loan takes a couple of minutes. But pre-approval will require careful examination of all the documents. That’s the only way for your loan officer to figure out how much house you can afford. Experienced loan originator can help you maximize your efforts by pointing out ways your loan application can look stronger. Are you worried about bad FICO or possibly not enough income or too low down payment? Make an appointment today and we’ll walk you through steps you need to take to qualify for a mortgage. Some things take time to fix but when you follow the plan we’ll get you pre-approved in no time.
Use this checklist to make sure you have everything you need before you begin your loan application. Having all necessary documentation up front saves time so your loan can close smoothly and quickly.
- Completed form 1003 – Uniform Loan Application Form
- 2 years of tax returns
- 2 years of W-2s
- If self-employed, 1099s and copy of business license
- Explanation letter if there are any gaps in last 2 years of employment
- Most recent (2 months) bank statements (all accounts and all pages)
- Explanation (signed and dated) of any deposits over $1,000 other than normal pay into accounts
- Most recent pay stubs (minimum of 30 days)
- Copy of driver’s license
- Copy of your social security card
- Explanation (signed and dated) of any inquiries on credit report
- Mortgage Statement, Insurance Declaration Page, and most recent tax statement for all other properties owned
- Divorce Decree and Separation Agreement (if applicable)
- Copy of Earnest Money Check & Purchase Contract
- Credit report
Mortgage interest rates are important. But other terms of the loan can be even more important especially if you’re not planning on sticking with the mortgage loan forever. If you don’t have 20% down payment most probably in 2-3 years you’ll be refinancing and this will reset your mortgage rate anyway. And if you’re in California refinancing may be a good option sooner than you think! Personally I was able to refinance in less than a year as prices in Los Angeles skyrocketed this year.
So how to find a mortgage that’s best for you?
What is with two-thirds of Angelenos and their apparent refusal to earn enough money to be able to afford a house? C’mon, guys, think of us – the real estate agents! How are we supposed to earn money???
This is actually not funny.
So you’re driving by a house with “For Sale” sign on… It’s not exactly what you’re looking for but you’d like to know its listing price. Do you want to call your Realtor? No. Do you want to call the listing agent? Definitely not. So what do you do? You take your phone out and go to your Zillow app… Now you have to figure out the address of this house and type it in…. OR you can snap a picture of the property without getting out of your car and in seconds you’ll have all the information you want! Pretty cool, right? And it works for any home, not only the ones that are on the market!
This is my recent favorite. This map shows exactly what kind of craziness is happening right now and where Los Angeles real estate market is heading. I like showing it to my clients that are in permanent “looking around” mode. They always think that maybe they should just wait a little longer and they’ll find “something better”. I say “while you waiting for something better, buy something good; and when you find that something better you can sell something good and put some extra cash in your pocket”. Makes sense? It’s fast and easy these days to offload unwanted single family home.
With shortage of inventory in Los Angeles getting rid of of a property to get another one, has never been easier. Look at these numbers! Hollywood +53% Bel Air / Holmby Hills +30% Westwood and Century City +25 Cheviot Hills +38 Palms/Mar Vista +27% Hancock Park / Wilshire +33%. Also Mid and East Los Angeles are +25-27%. Please remember these percentages do not represent value increase (not directly), but an average listing price. Nonetheless they prove we have small inventory / strong seller market. For the past month things slowed down a bit. The buyers who like to take their time with their purchase process this means the best time to buy. At least till January, when market usually tends to warm up again.
This is my first blog post. Finally! I’ve been wanting to do it for over a year now. How did I do? I need your input. Any comments would be greatly appreciated.