Mortgage Tips

Veterans: Get 100% Financing on Home Loans up to $1 Million

If you’ve served in the U.S. military, you can get a loan backed by the U.S. Department of Veterans Affairs with no down payment.

As the financial crisis gets further behind us, mortgage options get more flexible. One loan program that’s often overlooked is a VA loan. If you’ve served in the U.S. military, you can get a loan backed by the U.S. Department of Veterans Affairs (VA) with no down payment.

VA loan features

This may be a surprise: VA loans aren’t actually made by the VA. They are made by mortgage lenders, and the VA backs the loans, which enables lenders to be more flexible when making these loans.

Features of VA mortgages include:

  • Financing for up to 100 percent of a home’s value. The national loan limit is $417,000, but can go up to $1,000,000 in high-cost areas. VA loan limits for your area are available on the VA site, and a VA lender can also give you local VA loan limits.
  • The ability to finance most of your closing costs, including appraisal, credit report, title insurance, lender origination fee, recording fees, and survey fees. These represent the bulk of the closing costs in most home purchase transactions.
  • The ability to finance the one-time VA funding fee that’s required on all VA loans, and the ability to have this fee waived for certain circumstances, such as injury and disability.
  • No mortgage insurance. This is a material benefit that will save hundreds of dollars per month compared to other government-backed programs like FHA loans, which come with high mortgage insurance fees.
  • No prepayment penalty if you pay off the loan early.
  • Loans for a primary residence only.
  • A wide variety of fixed- or adjustable-rate mortgage loan programs.

Who’s eligible for VA loans?

It’s important to work with a VA loan specialist so they are familiar with the criteria of who exactly qualifies for VA loans. To be eligible for a VA loan, you must be one of the following:

  • Veteran.
  • Active duty service member.
  • Current or former National Guard or Reserve member who has been activated for federal active service.
  • Current National Guard or Reserve member who has never been activated for federal active service.
  • Discharged member of the National Guard or Selected Reserve who has never been activated for federal active service.
  • Surviving spouse receiving Dependency & Indemnity Compensation (DIC) benefits.
  • Surviving spouse who isn’t receiving DIC benefits.

If you’re in any of these categories, you can search for VA lenders to help you find a loan.

You will, however, need to provide your lender with a Certificate of Eligibility (COE) to verify that you’re eligible for a VA loan. The COEs for each category of eligible VA borrower have different requirements.

An expert VA lender can also help you obtain the correct COE based on your circumstances. If you fall into one of the eligible categories but don’t know how to get your COE, ask a lender to help you.

The VA loan approval process

Getting your VA loan approved is mostly the same as getting a non-VA loan approved. A lender will calculate your total proposed monthly housing cost plus all other monthly debt — like payments on credit cards, cars, and student loans — and compare it to your income. They’ll want to see that these total monthly costs don’t exceed 43 percent of your monthly income — although in certain cases, the automated loan underwriting engines lenders are required to use for VA loans might allow monthly costs to go as high as 50 percent of income.

Lenders will also look at your credit scores. Each lender will vary in terms of the credit score they require, but generally a score of 620 or better is required to qualify for a VA loan.

If you’re buying a condo, the VA must approve the condo project. The agency maintains a database of pre-approved condos, and if the condo you want isn’t on this list, you’ll need to work with your lender to get the condo approved.

This can add considerable time to the transaction, so make sure you do this research before writing an offer. And make sure your real estate agent is aware you’re getting a VA loan.

Posted by Julian Hebron on Zillow

Mortgage Tips

4 Ways Mortgage Lenders Can Help You Buy a Home


In the long home-buying journey, lenders are often pegged as the bad guy—the villain who holds the purse strings and decides whether (or not) to loosen ’em up and grant you a mortgage.

OK. Let’s take a step back. This bad rep is mostly a bad rap. Because the reality is that lenders make homeownership possible for the majority of Americans who do not have the ready cash to buy a home. And even if you’re a less-than-ideal home buyer, because of bad credit or lack of a down payment, they can actually help your loan go through.

Here are five ways lenders can assist you on the path to homeownership, and some recommendations as to how you can make the most of this relationship.

1. Lenders can get you pre-approved

If you know you’re ready to buy—before you’ve even seen the inside of a single house—it’s wise to head to a lender to get pre-approved for a mortgage, pronto. This means lenders check your financial history and determine how much money they’re willing to loan you to buy a home. “You want to apply before you’re entirely under the gun,” says Steven Bogan, regional managing director for Glendenning Mortgage Corporationin Haddonfield, NJ. “If you wait until you’ve made an offer on a house, you could run into problems.”

Pre-approval is proof to home sellers—and yourself!—that you won’t have problems getting the loan you need, once that special house comes your way. It is best to seek a pre-approval at least a month or two in advance, Bogan says. Requirements for approval in a post-housing bubble world can create headaches even for stellar borrowers.

But don’t start too early. Pre-approvals are only good for 30 to 60 days, so make sure you’re really ready to hit the pavement and start looking for houses. Still, don’t stress if your pre-approval expires; getting it re-upped isn’t a big deal.

“We usually just need to run your credit again, maybe get an updated pay stub or bank statement, and you’re good to go,” says Bogan.

2. If you can’t get pre-approved, lenders can show you how

So what if you apply for pre-approval and get denied? It hurts, but don’t worry—the pre-approval process isn’t a one-shot deal. Most lenders will be happy to work with you, even if you aren’t pre-approved right off the bat.

“The majority of lenders will give buyers a step-by-step path they need to follow to get up to approval,” says Bogan. And that usually involves boosting your credit score (more on that next).

3. Lenders can help you boost your credit score

One of the most common reasons home buyers don’t get approval is a lousy credit score—the all-important numerical summary of how reliable they’ve been paying off debts, from credit cards to college loans. You want a simple equation? The lower your score, the less likely you are to get a loan. The good news is that you can take action to boost your credit score. A credit repair company will show you the ropes, but will charge for those services.

You’ve actually got a free credit-boosting guide at your disposal: the lenders who just passed you up for a loan. In most cases, they’ll be happy to show you what you need to do to boost your credit score. And while it usually takes a few months for the credit bureaus to record these changes, lenders have another ace up their sleeve: They can do a “rapid re-score” that corrects and updates info on your credit report in a matter of days.

4. Lenders can help atypical borrowers

Many home buyers are employed, earning a regular W-2 income—a generally safe bet for lenders. But If you’re self-employed, a contractor or running your own business, and your income is more prone to valleys and peaks, a good relationship with a lender can help you cut past reservations about your loanworthiness. “Basically, we’re just going to look at the last two years of tax returns, instead of W-2’s and pay stubs,” says Bogan.

However, Bogan does recommend applying even earlier if you’re a non-W-2 wage earner, since there is more paperwork and more of an investigative process into your earnings. And unlike everyone else, you’ll need to consider your timing. “Say, for example, 2016 tax returns are almost due, and it was a great year incomewise. It would probably be in your advantage to wait until after you’ve filed your taxes to apply for a mortgage,” Bogan says.

No matter what your situation, though, to get the best help, you’re actually going to have to call. “You absolutely want to talk with somebody in person,” says Bogan. So skip the online forms, and ask your friends and family (or your Realtor®, if you have one already) to recommend someone you can sit down with to get the process rolling.

Posted by Angela Colley on


What You Need to Buy a House: Do You Have It All?


You’ve been drooling over local listings and saving every penny for a down payment. You’re ready. But before you begin your new home hunt in earnest, it’s helpful to know exactly what you need for a purchase. Do you have it all, or are you missing something that could throw a wrench in your dream of owning a home?

After all, you can’t just slap down a credit card to buy a house, particularly if you need amortgage—your lender will want to check your financial background to size up whether you can afford the place you’re eyeing. That means you’ll have to round up some paperwork as proof.

So here’s a handy checklist of what you’ll need to sail through this process without a hitch.

Tax returns

To ensure you have the income history to buy a house, most lenders will ask for two years’ worth of tax returns, two years of W-2s, or both. This is definitely the case for freelancers and self-employed borrowers, but full-time employees may be asked for all of this paperwork as well. Your lender may even retrieve your tax returns themselves straight from the IRS  (with your written permission, of course), since this cuts down on potential fraud. Still, it’s a good idea to get those documents in order just in case.

Pay stubs

Tax returns won’t be where your proof of income ends. You will also need to rustle up copies of your past two months of pay stubs, according to Martha Witte, vice president of FM Home Loans. If you’re self-employed or freelancing, things get a bit more complicated.

“Most of the time, contract employees receive a 1099 and file a Schedule C on their personal returns. In this instance, we would take a two-year average of the Schedule C income,” Witte says.

Also be prepared to show a projected balance sheet, detailing what you’ve earned this year and what you plan to earn in the coming months.

“It doesn’t need to be fancy, but it should ideally support that you are on track to have consistent income in the current year, when compared to other years,” Witte says.

Financial statements

You will also need to show two months of asset statements—think your checking and savings accounts. This one is a biggie because your lender will use these statements to prove you have enough money available to buy a home and then some.

“You will need liquid funds available for the down payment and to cover closing costs. You will also need reserves after closing, which means you can’t be left with $0 once you buy the home,” Witte says. While the reserve amounts vary, two to four months of reserves is enough for most conventional loans, she says.

Getting a down payment gift?

Finally, if you’re planning on getting a portion of your down payment as a gift (you lucky dog, you), plan on getting some documentation from the gift-givers, like copies of their checking or savings account monthly statements. “We need to also verify the donor’sability to give the gift,” Witte says.

When in doubt, follow this simple rule of thumb from Witte: “Follow the rule of twos,” meaning you’ll need a two-year snapshot of your income and finances.

Posted by Angela Colley on


Serious About Home Buying? Get Pre-Approved

In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity:Your current and future ability to make your payments
  2. Capital or cash reserves:The money, savings and investments you have that can be sold quickly for cash
  3. Collateral:The home, or type of home, that you would like to purchase
  4. Credit:Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Posted by The KCM Crew


Pros and Cons of First-Time Homebuyer Loans

Navigating the range of home loans to find the one that best meets your needs can be difficult, particularly if this is the first home you’re buying.

Pros and Cons of First Time Homebuyer Loans

To make things easier, the federal government and most states offer insured home loans tailored to first-time homebuyers. These loans offer attractive benefits that can make the home-buying experience less costly and less restrictive. But they aren’t for everyone.

What Is a First-Time Homebuyer Loan?

A first-time homebuyer loan is a mortgage tailored to people buying their first home. While definitions of first-time homebuyer vary, it is usually someone who has never been listed on a deed as the owner of real estate. Be sure to confirm this with the loan provider when looking to obtain such a loan.

First-time homebuyer loans offer a low down payment, reduced interest, limited fees and the possibility of deferring payments. These types of loans are offered at a federal level by the Federal Housing Administration and by most states.

FHA first-time homebuyer loan programs offer easier qualifying guidelines than many other loan types. These loans allow higher debt ratios, lower credit scores, reduced closing costs and fees and limited down payments—typically around 3.5% of the purchase price.

Likewise, many state loans for first-time homebuyers are funded by the federal government. Most offer low interest rates, comparatively smaller down payment requirements and reduced fees.

Pros of First-Time Homebuyer Loans

The comparatively lower restrictions on these loans make them ideal for first-time homebuyers. You might want to consider these loans if:

  • You don’t have enough money saved up for a large down payment.
  • You have a limited ability to meet high interest payments and fees.
  • Your credit score is not high enough to qualify for other loan types.

But even if you do have funds saved for a large down payment, the low interest rates on first-time homebuyer loans could be too good to pass up.

Cons of First-Time Homebuyer Loans

If you are looking to buy a really expensive home in an affluent area, you might have to look elsewhere. On Jan. 1, the federal Housing and Urban Development department reduced the “national ceiling-loan limit” to $625,500 for most affluent of areas. Loan limits vary depending on the median income in that area, so be sure to check with your real estate agent or lender.

Another potential drawback is the requirement that the home you buy will be your primary place of residence. In other words, if you were looking to buy the property with the intention of renting it out, you probably won’t qualify for the loan.

Some other potential drawbacks include:

  • If you sell your home soon after purchasing it, you could lose some of the loan benefits.
  • If you want to refinance at a later date or otherwise change the terms of your debt or your collateral, this may not be possible with a first-time homebuyer loan.
  • While some of these loans don’t require you to purchase private mortgage insurance, you may be required to take out insurance provided by the loan program, and this insurance policy could have higher fees and longer payment terms than a private insurance option.

Despite these drawbacks, a first-time homebuyer loan could still be the most attractive type for you. Take a step back, evaluate your financial situation, consider the home you’re looking to buy and consider your options.

This article was originally published by Angela Colley on See the original article here


Understanding Mortgage Closing Costs

Shopping for the best mortgage involves more than just checking interest rates and loan terms. Many borrowers are surprised by the many additional costs involved in closing the loan.

Understanding Mortgage Closing Costs

Almost all closing costs relate to fees that the mortgage lender is charged by a third-party company and then passes on to the borrower. Some of the fees are additional costs the lender levies. Because these fees are all settled at the closing table, they are commonly referred to as closing costs.

Breaking down closing costs

Closing costs usually account for 2 to 5 percent of a home’s sale price, although they may be more or less in some cases. These costs typically cover:

  • Obtaining a credit report
  • Processing paperwork for the loan (loan origination fees)
  • Legal fees
  • Home inspections
  • Appraisals
  • Surveys
  • Title insurance
  • Title searches
  • An escrow deposit
  • Recording the transaction in the city or county’s records
  • Underwriting the mortgage (evaluating the borrower and the property)

In addition to these fees, home buyers may elect to increase their closing costs through discount points, which lower the mortgage’s interest rate and saves the borrower money over the life of the loan.

Who pays closing costs?

In most cases, the buyer pays the bulk of the closing costs. In some cases, however, other parties may absorb a portion or all of these costs. For instance, if a home is purchased using a Veterans Affairs (VA) loan, then the seller will pay some of the closing costs, and the buyer will pay the remaining costs.

Some mortgage lenders advertise mortgages without closing costs. These may or may not be a good choice, depending on the specifics of the mortgage. Home buyers, however, should realize that any bank offering mortgages without closing costs will likely build those fees into the structure of the mortgage. Buyers (or sellers) will probably pay the fees associated with purchasing a house, one way or another.

Saving for closing costs

Home buyers should be aware of the closing costs they will be expected to pay because these fees can significantly increase the amount of money needed at closing. The good news is that lenders must provide a Good Faith Estimate (GFE) of these costs shortly after the borrower applies for the loan. The law now states that the final settlement of the loan must not deviate from this estimate by more than 105 percent — and for some loan products not at all.

But, borrowers can still be surprised by the GFE if they are not already planning to pay at least some closing costs.

Consider the following example: A home is sold for $100,000, and the buyer will make an initial down payment of $10,000 (10 percent). But that’s not all the money the buyer will need to bring to the closing table. The closing costs can be expected to be around 5 percent, or $5,000. The buyer actually needs to have $15,000, not $10,000 at closing. The fees increase how much the home buyer needs at closing by 50 percent, in this case.

This article was originally published by Rick Grant on Zillow Blog. See the original article here.

Mortgage Tips

How to Get the Best Mortgage for You

You and your mortgage might be together for years, so you will want to get the best one around. Finding your perfect match takes more than just choosing the one with the lowest interest rate. There are other factors — and fees — to consider. Before you sign on the dotted line, make sure you know what to look for.

Loan Types

A variety of mortgages are available on the market, but two types are the most common: fixed-rate and adjustable-rate. A fixed-rate mortgage has the same interest rate through the life of the loan. Fixed-rate mortgages eliminate surprises, which is good if interest rates rise; but if interest rates fall, you’ll be stuck with the same interest payment.

An adjustable rate mortgage typically starts with a lower short-term interest rate. After the initial period ends, your rate will fluctuate throughout the rest of the loan. An adjustable-rate mortgage can be a gamble. If interest rates are low, you’ll pay less, but if interest rates rise, you could end up paying more each month.

While 30-year mortgages are the most common, you have the option of considering mortgages with shorter pay-back periods of 10, 15 or 20 years, among others. You’ll pay much less interest over the life of these shorter-term loans, but your monthly payments will be higher than with a 30-year mortgage. There may be tax advantages to a 30-year mortgage as well. You could also choose a 30-year loan and, if you’re disciplined, pay it off early. Making this decision depends a lot on where you are in your life, and how you want to manage your investments. (For more, see Do You Need a 30-Year Mortgage?)


When looking for a lender, don’t settle on the first company to offer you a mortgage. Interest rates and fees can vary widely between lenders, and you’ll need to comparison shop to make sure you’re getting the best deal. To simplify the process, use an online tool such as®’s  Get a Mortgage Quote to see offers from dozens of lenders.

Interest Rates

Interest rates vary depending on current market conditions, economic factors and your own background. Generally, if you have a steady job and a high credit score, you’ll qualify for the best rates, but if you have a few blemishes on your credit report, you’re considered to be a higher risk and may only qualify for a higher interest rate. Different lenders may also offer you different interest rates.

To get an idea of how different interest rates will affect your loan amount and monthly payment, try the Loan Comparison by Rate calculator.


Interest isn’t the only extra you’ll pay with a mortgage. Many lenders also tack on additional fees. Often known as junk fees, these include charges for things such as loan processing or loan administration. You may not be able to get around these fees entirely, but you can save yourself money by comparing the fees across several lenders.

Private Mortgage Insurance

When you buy a house the amount you put down is considered the equity (or stake) you have in the house. If you do not have a large down payment, you won’t have much equity in the house, which lenders consider a higher risk. To protect themselves in case you default on the loan, most lenders require that you pay an additional fee known asprivate mortgage insurance.

PMI can add several thousand dollars to the cost of your loan. To avoid it, you’ll need to put at least 20 percent down. If you have to pay PMI, discuss the total cost and payments with your lender. PMI varies depending on your loan size and terms, so you may save money with a different loan.

Lock Periods

Finally, keep in mind that offers from lenders have a time limit, known as the lock period. During this time, the interest rate is locked in. However, if you go past the lock period, your interest rate could be higher or lower depending on current forecasts. To keep from losing your preferred interest rate, you’ll have to close within the lock period.

By Angela Colley | | Source:

Mortgage Tips

Be Prepared for Mortgage Rules Changes in 2014

The world of mortgage lending has changed significantly since the housing bubble burst. Mortgage lenders have returned to traditional loan standards that require extensive documentation of income and assets for a loan approval.

Government regulatory agencies also continue to react to the housing crisis, with more adjustments to mortgage requirements set to go into effect in 2014:

Qualified Mortgage Rules

Whether you’re thinking of buying a home or mulling over refinancing your mortgage, Jan. 10, 2014, could be an important date for you to remember. The Consumer Financial Protection Bureau is in the process of implementing regulations to meet goals set forth by the Dodd-Frank Act in Congress, which was meant to correct the errors that led to the housing crisis. The CFPB’s “Qualified Mortgage,” or QM, rules go into effect in January. Essentially, these rules require lenders to prove borrowers’ ability to repay a loan by meeting several guidelines, including a maximum debt-to-income ratio of 43 percent. While many lenders already limit borrowers to a similar maximum debt-to-income ratio, the new rules won’t allow for any compensating circumstances such as significant cash reserves or a large down payment to be considered in order to offset a higher debt ratio.

If you have credit problems or a high debt-to-income ratio, you may want to push through your loan application for a refinance or home purchase to make sure you close your loan before the new rules go into effect. However, many lenders are already using QM standards in order to make sure they’re in compliance with the regulation. Mortgages that don’t meet QM standards will have to be held by the lender rather than sold to Fannie Mae and Freddie Mac, so most lenders are careful to meet the new standards.

The 3 Percent Rule

The new QM requirements also limit fees for originating a loan to no more than 3 percent of the loan amount. If you’re financing a more costly home, such as a $400,000 home or more, the lender can easily keep fees under 3 percent, which in this case would be $12,000. However, if you’re refinancing a smaller loan balance or purchasing a less expensive home — for example, for $80,000 — the lender might find it more difficult to keep all fees under $2,400. Mortgage lenders are less likely to offer loans for smaller amounts since they won’t always recoup their costs and make enough profit to pay their staff. If you need a small loan, you may want to push to get it closed before Jan. 10, 2014.

Self-Employed Borrowers

One particular group of borrowers will most likely be impacted by the QM rules: self-employed borrowers. These borrowers already are heavily scrutinized and find it more difficult to obtain a mortgage because they must prove their income based on tax returns and profit-and-loss statements, rather than standard paystubs and W2 forms. The “ability-to-repay” feature of QM rules requires all borrowers to prove they have the cash flow to make payments on their mortgage. Self-employed borrowers often have fluctuating income and rely on cash reserves to pay bills in-between payments, but the emphasis on cash flow can make it harder for lenders to approve a loan even for someone with significant funds in the bank.

Potential Lower Loan Limits

The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced in October that plans to reduce the maximum loan limits for conventional conforming loans will be delayed until later in 2014. Typically, loan limits are adjusted on Jan. 1 of each year, but the agency decided to wait to see the impact of the introduction of QM rules before making changes. Currently, the limits are $417,000 in most housing markets and rise to $625,500 in high cost areas. If you need a mortgage near these limits, it would be wise to close your loan earlier in 2014 rather than later in case limits are lowered.

Realtor can recommend a reliable lender who can help you navigate the new mortgage world in 2014.

By Michele Lerner of To see the original article, click here


Mortgage Tips

Applying for a Mortgage? Get Your Docs in a Row

Providing all the required paperwork and documents when applying for a mortgage may be one of the top anxiety-inducing processes of your financial life.

Just remember that countless homebuyers before you have survived the ordeal, and you can make it easier on yourself if you know what to expect.

“It is very common for a mortgage lender to request that you provide certain employment and financial documents when applying for a mortgage,” said Samantha Reeves, senior mortgage homebuying writer for Veterans United Home Loans. “These common documents include the most recent two years of tax returns with all attachments, such as W-2s and 1099s; your most recent bank statement for all accounts; your most recent 30 days pay stubs; and identification documentation.”

In addition to these documents, you may be asked to provide other records specific to your situation.

“For example, if you own a business you may need to provide business tax returns and profit-and-loss statements,” she said. “If you receive retirement or disability [payments], you may need to provide evidence of its continuation and receipt.”

A good way to prepare for the process is to assemble a checklist of everything you’ll need. Jeffrey M. Sutton, a mortgage loan officer at George Mason Mortgage in Virginia, provides the following checklist to his clients:

Mortgage Application Checklist

• A copy of your most recent pay stubs covering a 30-day period.

• A copy of your last two years of W-2 tax returns.

• Proof of any additional income needed to qualify.

• Copies of most recent two months asset account statements on all accounts including
checking, savings, mutual funds, stocks, bonds, 401k, TSP and/or IRA accounts. Please
provide all pages for each statement.

• Name, address and phone number of landlord(s) for past two years.

• Divorce decree, separation agreement, and property settlement agreement, if applicable.

• If investment properties owned, past two year’s complete Federal Tax Returns (include
all schedules) and a current one-year lease for each investment property owned. Please be
sure that page two of the tax returns is signed.

• Ratified sales contract, if available.

• If permanent resident alien, please provide copy of green card.

• Copy of Driver’s License.

Additional information required for self employed or commissioned borrowers:

• Past two year’s complete federal individual tax returns with all schedules, W-2s and 1099s.

Please also provide corporate, S-Corp, or partnership returns, if applicable.

• Year-to-date Profit and Loss Statement and Balance Sheet dated to within the most recent 90-day period.

• Copy of current Business License.

Additional information required if applying for a VA loan.

• Original Green Certificate of Eligibility.

• Copy of DD 214 OR Statement of Service from your commanding officer (stating rank,
position and that you are in good standing).

Additional information required when refinancing an existing

• Copy of Recorded Deed of Trust, and HUD-1 Settlement Statement

• Copy of Property Survey and Title Insurance Policy

• Copy of existing Hazard Insurance Policy (Homeowners Insurance)

Organize, Assemble and Deliver

After you have accumulated your paperwork, follow this advice from the experts:

  • Organize and make it easy to access — “One key tip for success when applying for a mortgage is to keep all of your financial and employment documentation organized and easily accessible,” Reeves said. “You will save a lot of time searching and stressing over the location of documents while being under contract on a home. Get everything together in advance. You will thank yourself later.”
  • Don’t leave anything out — Borrowers need to tell their mortgage person everything, said Leighton Johnson, branch manager and senior originator at Silverton Mortgage Specialists. “It’s not like buying a car, where the salesman is trying to sell them the least amount of car for the most payment. The mortgage person is trying to help them get the most house for the least payment, and they need all the information upfront. Most issues can be resolved easier if we know about them at application.”
  • No “blackouts” – “Don’t black out any numbers either on the tax returns or on the bank statements,” advised Linda Fleischmann, a mortgage consultant at Stress Free Mortgage. “If you do, you’ll have to resend it without the blackouts later.”
  • No state income tax returns – Don’t bother with the state portion of your income tax returns. “The lenders don’t need them and shred them,” Fleischmann said.

Know What You Can Pay

Before you file your mortgage application, make sure you have a mortgage figure in mind that will allow you to sleep at night.

“Select a dollar amount that stays within your mortgage payment limits,” said financial adviser Chris Hogan. “Banks are notorious for pre-approving amounts higher than you originally applied for. However, you’re the one who will be making the payments, not the bank. So stand firm.”

Hogan also advised that mortgage borrowers get their credit report from TransUnionExperian and Equifax.

“Scour the report, and make sure there are no surprises or inaccuracies,” Hogan said.

You can also get a free annual credit report at

By Brian O’Connell of To view the original article, click here.