Waiting for an approval on a mortgage application can be difficult. In today's volatile housing market, a delay in the loan process can mean losing the opportunity altogether. There's only so much you can do to speed things up but there might be some steps you can take. You're off to a good start if you bring the required documentation to the first meeting with the lender. Here is a list of what you'll generally need:
| If you believe there is information on your credit report that is outdated, incorrect, or incomplete, you have the right to request a correction under the Fair Credit Reporting Act.
How long can negative information stay on your credit report? In general, it can remain for up to seven years and a bankruptcy can remain for ten years. (There are some exceptions to these limits.)
If there is an error or omission that you would like corrected, start by contacting both the credit reporting agency and the creditor that provided the information, in writing. Include copies of documents that support your position.
Also, send a copy of your credit report, with the items you dispute clearly marked. State the facts, the reason for the dispute, and the action you are requesting (deletion or correction). Send the letters by certified mail and keep copies.
The credit reporting agency must reinvestigate the items in question within 30 days, and send you the written results and a free copy of your credit report. You can request that the agency send a copy of the changed report to anyone who has received your credit report within the past six months.
Even if the reinvestigation does not resolve the issue, you can ask the credit reporting agency in writing to include a copy of your dispute in your credit file.
The Fair Credit Reporting Act entitles you to one free credit report each year. This is an effort by the federal government to encourage consumers to stay on top of their credit information. Request yours by visiting annualcreditreport.com.
Contract. If you don't already have one, ask your real estate agent for a signed copy of the purchase contract on the house, including a tax and legal description of the property.
Proof of income. For employees, this includes W-2s for at least two years and the last two month's worth of pay stubs. If you're self-employed, you typically need tax returns for the last two or three years, plus a balance sheet and a year-to-date profit and loss statement for your business. If you have significant long-term contracts with key customers, take those as well.
Bank account information. Have the name and address of your bank, along with all account numbers, and your most recent bank statement. Of course if your lender is your regular bank, they probably won't need your statements. Also have details available concerning investments such as your retirement account and any stocks you may own.
Current mortgage or rental obligations. Take cancelled checks representing housing payments for the past 12 months and the name and address of your landlord, if applicable.
Schedule of debts. Provide a list of all credit card debts and other loans. The lender will need the account numbers, the approximate balances, and the contact information for each creditor.
In the case of bankruptcy, bring a copy of the Bankruptcy Petition listing all creditors and the Notice of Discharge. You may also want to provide a letter explaining why the bankruptcy occurred.
Certificate of Eligibility. If you qualify for a Veteran's Administration (VA) loan and you want a loan guaranteed through the VA, provide proof of eligibility, as well as a copy of your driver's license and Social Security card.
In the case of divorce, a copy of the divorce decree or notice of legal separation if it occurred within the last few years. You may also need documentation if you pay or receive alimony or child support
A gift letter if you are receiving a monetary gift from a relative to help make the purchase.
Explanation of negative entries on your credit report. If there are some negative, but accurate marks against you, some lenders recommend that you provide an explanation at the time of your application. For example, you may have fallen behind after losing your job five years ago. Even though you've fully recovered and your finances are back on track, there may still be references on your credit report. If the negative information is inaccurate or incomplete, take action to correct it. But in the meantime, include with your application a brief explanation of why the black mark occurred. (See right-hand box for more about correcting errors on your credit history.)
Get the Details Right on the Application
When you fill out the application, you'll generally be asked for information about your employer including the length of time on the job, the name of your supervisor, and of course, contact information. If you haven't been with an employer long, you may be asked for your last employer as well, especially if you've changed industries. A loan processor will probably verify your statements so make it as easy as possible for him or her to get the information by providing accurate and complete information.
The application may ask about your other assets, such as the make and model of vehicles and any balances owed on them.
After you've turned in the application, if expediency is important, be available to talk to a potential lender. In other words, don't submit it and then leave town. It's not unusual for loan applications to hit snags. So if your lender asks for more information, provide it as quickly as possible.
This article was provided by Tom Halfpap of Monarch Mortgage. Look up Tom for a fast and hassle-free home mortgage pre-approval.
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