How Will You Finance Your New Home Loan?

By Debbie Wilson
LoanPage.com Columnist

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Looking for and selecting a home can be one of the most exciting adventures of your life. In today's buyer's market, home ownership can be even more affordable than renting.

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But choosing your mortgage lender and new home loan can be as important as choosing your home. Even before you start looking for a house, developing a relationship with a lender, having your finances in order, and getting pre-approved for your purchase will put you in a stronger bargaining position and avoid unnecessary stress.

Mortgage Information Required

Regardless of which lender you choose, he or she will need some critical information from you. This information can be broken down into three categories: employment/income, personal assets, and credit/debts.

Employment History

Your employment history, including salary and bonuses for the past two years will be an important part of the new home loan process. Lenders will look to you for job stability, steady income, and potential income, including dividends and interest. You will also be required to report other regular income such as alimony or child support. Additionally, you may be asked to provide tax returns and W-2s for the past two years as back-up support.

Finances

Your personal assets help the lender determine your net worth. Typical assets include bank balances, real estate holdings, investment grade art or antiques, and investments in stocks, bonds, mutual funds, and other marketable securities. Personal property is less important. A rough estimate of the value of your cars, furniture, display artwork, etc., is all that's needed. These are weighed against your debts such as credit cards, auto loans, etc.

Credit History

Finally, you should obtain a copy of your credit report. You're entitled to a free one each year. Ideally, you have done this well in advance of applying for a loan, giving you time to correct any inaccuracies or prepare explanations. Be prepared to answer any questions your lender may have regarding its content.

After all this careful assembling of your finance and credit information, you'll be well on your way to obtaining that new home loan and enjoying your fabulous new home.

Source
Fannie Mae

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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