Drawing out a mortgage for purchasing a home may be the single biggest loan you have to request for. Many people go through this transaction without the proper knowledge and tools which results to costly mistakes, which negatively affects their financial status for a long period. This is why extensive preparation is very important in order to make a well-informed decision when it comes to looking for a mortgage lender. In this article, you will be provided with the basic information and ideas on how to process your mortgage in San Francisco.
What Do You Need?
Your credit standing which is determined in your FICO score is a major factor being considered when you apply for a home mortgage loan. FICO stands for Fair, Isaac & Co and these are the names of those who were the developers of this innovative credit scoring being used to ascertain your reliability when it comes to paying for your mortgages. This method of credit scoring was established in the late ‘50s and became the primary method for evaluation used by lenders. The credit score measures the risk level of the borrower and a convenient means to express an individual’s credit history in numbers.
The better your credit score is, the better interest rates and loan packages will be offered to you. However, although a lower rate can make your mortgage more affordable, it does not follow that you can actually afford it. This is why many mortgage lenders offer the usage of mortgage calculators. This useful tool will help you and the lender estimate the monthly payments by calculating the interest rate and the entire loan amount. You will be able to determine whether you can actually afford what you are applying for, which will avoid frustrations in the future.
Regarding your income, San Francisco mortgage lenders need of at least 2 years records of your employment history. You will need to supply your Tax Returns and W-2s of the past 2 years as well and latest paycheck stubs. There are instances when mortgage lenders will consider your income from your declared profits on your taxes, and not only from your gross income. This depends on the loan provider, though, so it is best that you verify with the mortgage lender of your choice to check how they evaluate income. If you have additional income from self-employment, gratuities and ancillary sources, you may need to support the claim with bank statements for at least two years to prove this.
Other documents must be accomplished to secure a loan through a San Francisco mortgage lender. It is very important that you know which documents are required and which to compile so that you can save time and will be able to avoid delays in the future. There may be additional information and documents required according to the circumstances of your request for loan. It is best that you discuss this with your realtor.