Vahe Hayrapetian works for Skyline Financial Corporation, a group that helps to get people into the homes of their dreams. Vahe knows that for many first-time purchasers, the process of applying for a mortgage is often confusing. They have many questions as they begin the process of applying for a loan to finance their house. To help make the process less confusing, Vahe answers some common questions about mortgages.
Can I apply for my loan without knowing which property I’d like to buy?
Yes, and in fact this is one of the wisest things you can do as you begin the process. When you apply in advance, you are issued a pre-qualification letter. This document can help assure real estate brokers and sellers that you are a qualified and responsible buyer. The pre-qualification process helps verify that you are looking in a price range that fits your budget. Getting pre-qualified can greatly assist you as you make an offer on a property.
Does income from my second job count as my application is reviewed?
A person who has held a second job for at least two years can usually have that source of income verified.
Must I offer information about child support, separate maintenance, or alimony income?
Details about these sources of income are not required unless you would like it to get considered for repaying this mortgage.
I have co-signed a loan for another person. How will this impact my ability to get my own mortgage?
In general, a co-signed loan does not get considered as your application is assessed. As long as your co-signed loan does not impact your ability to obtain a new mortgage then it is left alone. However, when it does make a difference, then lenders can ignore the monthly payment of the co-signed debt as long as you can offer verification that the other person responsible for the debt is making the necessary payments. This is done by getting copies of their cancelled checks over the course of the last twelve months.
How does my past history of foreclosure or bankruptcy affect my ability to get a mortgage this time around?
If you have a past history of foreclosure or bankruptcy, it’s possible that this will hinder your ability to get a new mortgage. Unless you can prove that the foreclosure or bankruptcy occurred due to situations beyond your control, most lenders ask you to wait two to four years after these events in order to issue a new mortgage. It’s also essential that you currently have a solid credit history.
I work for myself. How does a lender verify my income?
Usually income of self-employed individuals by getting copies of personal or business federal tax returns during the most recent two-year span. However, it may not become necessary to have full copies of that individual’s tax returns, depending on their financial situation.
The lender will review and average the net income that is reported on the tax returns in order to determine the income that may get used to qualify for a mortgage. Lenders usually ask for a one or two year history of self-employment in order to verify that this income is stable.