What you need to know about mortgage financing basics

On some loan programs you have to take a HomeBuyer Education class approved by HUD.

Your middle Credit score will affect the interest rate or even if you qualify for the loan progam.

On some government loan programs you can make too much income to qualify.

If you are self-employed, you will need the last two years of federal tax returns.  If last years income is less than the previous years, this could affect loan approval.

The condition of the property could affect loan approval or the type of loan available.

If your income does not show on a tax return it cannot be counted. (Exceptions SSI or SSI disability or child support)

Family members can give the borrower a monetary gift so the borrower has funds to close the loan.

What questions you should be asking

 Do I qualify for VA loan and what are the benefits of this type of loan?

 Do I qualify for a loan with no down payment?

 Do I qualify for down payment assistance?

 Why would a conventional loan be better than an FHA loan?

 Who can pay for my closing costs?

 Why would an FHA loan be better than a Conventional loan?

 What are the benefits of a loan with Private Mortgage Insurance (PMI)?

 What is the best way to pay for Private Mortgage Insurance, monthly, up front or financed?

What you can do to make the process easier

 Provide current pay stubs that show current and year to date earnings and deductions

 Last two-three years W2s and 1099s or K1s

 Last two years Federal Tax returns and schedules

 Last two years business tax returns if self employed

 Last two months Bank or Credit Union statements including sourcing any non payroll deposits

 Provide Divorce decrees, Child or Property Settlement Agreements

 Provide landlord information