Since buying a home is such a large investment, most buyers need to utilize the services of a mortgage lender to make it happen. But when you borrow money from a lender, they want to make sure they will be getting repaid along with interest. They will ask you many questions before deciding to offer you a mortgage loan. Here are some questions you should expect to answer so you can be prepared with answers and documentation.
1. What is your employment and income status?
Being employed is vital when applying for a mortgage. Your lender is going to want to know many things about your employment status, including where you work, how much you make and how long you have worked there. In addition, they will ask about how you are paid – do you receive salary? Commission? Or hourly wages? Do you have a regular income or is it fairly irregular? Many mortgage lenders will also want to see pay stubs and other income documentation before making their final decision.
2. What debts do you have?
Debt is simply a part of American culture. But if you have too much debt, you are going to have a difficult time finding a mortgage lender to loan you money. Your lender is going to want to know about your auto loan debts, your credit card debts, medical bills, student loans and any other monies that you owe. They will also want to know how much money you have left after making a down payment on the home and paying for closing costs. Bring documentation of your debts and your bank statements when meeting with your lender and don’t try to hide anything. If you do, you could end up with financial problems – or even legal problems - soon after moving into your new home.
3. How much can you put down?
The bigger of a down payment you can put down on a house, the better your chances of getting a home loan. This is especially true if you have questionable credit. When you put a larger down payment on a home, the lender sees that you are financially invested in the home so you become a better credit risk for them. However, they may ask where you got the money from – was it a gift from your parents or did you save up for a few years? This may not have a huge impact on the lender’s decision, but it may still be a factor.
4. What is the purpose of the home?
In most cases, you will be buying a home as a primary residence. However, there are many home buyers who purchase homes as investment properties to rent out or as vacation homes. Your lender is going to want to know what you plan on doing with the home after you buy it so be honest with them about your intentions.
Your mortgage lender is there to help you find a home loan. While they are in the business to make money, they also have a great deal of expertise. If you are honest with them about these and the other questions that they ask, they are in a better position to help you get the mortgage loan.
Add your Comment
or use your BestCashCow account