Tag: loan

How to get pre-approved for a mortgage

Things to avoid when buying a home in Michigan.

If you are new to the home-buying process, you are probably aware that one of the best first courses of action is to get pre-approved before you start house hunting. So, you head to your bank or financial institution, but you have no idea what goes into the process of pre-approval. What do you need to get pre-approved? What should you expect? Here’s the low-down.

What is mortgage pre-approval?

First comes first. What is pre-approval, and why is it so important? Pre-approval is the first step to getting a mortgage. Your lender will take a look at your finances, your credit history, and your employment and determine whether you can afford to buy a home and, if you can, how much of a home you can afford to buy. That will help you narrow down your choices as you search for the right home within your budget. Getting pre-approved will also show home sellers and their realtors that you are ready to buy.

What do you need to get pre-approved?

To help the pre-approval process go smoothly, before you sit down with a mortgage professional, make sure you check your credit reports. Resolve anything negative, such as bills in collections, and dispute any errors. For most loan programs the disputes will need to be resolved and closed out prior to your loan application. This will give you the highest and most accurate credit score for mortgage qualifying. Higher credit scores will allow for a quicker loan process with lower interest rates.

Throughout the mortgage process, don’t apply for any new credit cards, don’t take on any new debt or make any large purchases, don’t close any of your current credit accounts, and don’t ask any of your creditors to lower your credit limit. These could significantly alter your chances of getting a mortgage.

Pre-Approval Document Checklist

  • Drivers License
  • Social Security Card
  • Most Recent 2 Years W2 statements
  • Most Recent 2 Years Tax Returns (If Self Employed or Commission Based)
  • 1 Month of Paystubs
  • 2 Months of Bank Statements
  • Quarterly Retirement Account Statement
  • Proof of 12 Month Rent History (may not be required)

For pre-approval, you’ll also need to provide documentation of the last two years of tax returns; proof of income including W-2s and pay stubs; a written referral letter from your landlord with some proof that you’ve been paying your rent in time (such as carbon copies of checks or money orders); two forms of government identification such as drivers license and social security card; and proof of income from other sources, such as government assistance and child support. Lastly you will need to document any assets. This will include any money you have in stocks, IRAs and retirement accounts. Also make sure the money for your down payment and closing costs are in the bank, ready to go.

Request a mortgage pre-approval by phone or online

Once you have gather the required documentation you can call a loan officer at 1-800-555-2098 to get start over the phone or apply online at https://riverbankfinance.com/app which is our online secure loan application.  A licensed loan officer walk you through the pre-approval process and help to review all available loan options.  Many times we are able to issue a pre-approval over the phone or online within minutes.

What happens when you get pre-approved?

Once you are officially pre-approved your loan officer will provide you with a Pre-Approval Certification. This document will state that we have reviewed your loan eligibility and have determined that you are likely to qualify for the loan program given. Your Realtor will ask for this document before you start shopping for a home. You may also want this updated prior to writing an offer on a home to make sure it matches your bid.

Related: Visit our Mortgage Calculators to estimate mortgage payments

So, when you’re feeling ready, come and visit us here at Riverbank Finance, and we can help you start the pre-approval process. Call us at 800-555-2098 to schedule an appointment with one of our professional loan officers. We want to help you get into your new home!

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Buy A House with a Small Down Payment

If you are a first-time homebuyer, getting a mortgage may seem overwhelming — especially with all the different options available. Maybe you don’t have a lot of money for a down payment or your credit isn’t great. The good news is, you can still qualify for a home loan. Here are 4 low or no down payment options that can help you, as a first-time homebuyer, get into the house of your dreams.

FHA Loan

With an FHA loan, all you need is a 3.5% minimum down payment to buy your first home. Because the Federal Housing Administration backs the FHA loan, the qualifications are a bit more lenient. People who have no established credit or small savings for a down payment, and even a credit score as low as 580 can qualify. The FHA loan is also available to immigrants who have a Visa or Green Card, as well as those who have gaps in their employment.

It’s also easier to qualify for an FHA loan if you’ve filed for bankruptcy. With a conventional loan, you have to wait four years after filing Chapter 7 to apply for a mortgage. With the FHA loan, you only have to wait two years. If you filed for Chapter 13, you only have to wait one year. You can also get an FHA loan three years after being foreclosed on your previous property.

VA Loan

The government created the VA loan to provide home ownership to veterans and military personnel. Like the FHA loan, the government backs the VA loan for extra security, so qualifying is easier. To qualify, you must get a certificate of eligibility from the Veterans Administration. Having bad credit may not hinder you from getting approved. VA loans require no down payment or Private Mortgage Insurance (PMI). Veterans can choose either a 30-year fixed VA loan or a 15-year fixed VA loan for up to $424,100. They may also get a cash-out refinance of up to 100% of their home.

USDA Rural Development Loan

For those wishing to buy a home in a rural area, the USDA Rural Development Loan requires zero down payment, making it great for first-time home buyers. The government also backs this loan for added security, so there’s low or no PMI attached to it. You only have to pay a 1% guarantee fee upfront and 0.5% each year after that. That’s less than the 1.75% up front and 0.85% each year with the FHA loan. If you’ve recently filed for bankruptcy or were foreclosed, you won’t have to wait too long to qualify for a USDA loan.

Conventional 1% Down Mortgage

Important Update! Last date for loan submissions is 5/31/2018. Program is being discontinued.

Riverbank Finance offers homebuyers a way to put only 1% down on a home and still get a conventional mortgage. In this case, the home buyer puts 1% down and the lender (Riverbank Finance) contributes 2%, giving home buyer 3% equity when closing on the home. Freddie Mac created this option to make homes more affordable for new buyers. It allows people to buy a new home for, essentially, the cost of one month’s rent and avoid PMI altogether or drop PMI in the future. Your 1% down payment may be a gift from someone, you must have at least a 700 FICO score, and your debt-to-income (DTI) ratio is limited to 43%.

For more information or to speak with a loan officer about any of these mortgage options, call Riverbank Finance at (800) 555-2098.

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Three Rules for First-Time Homebuyers

first time homebuyers

Ready to stop wasting money on rent and invest in your own home? As a first-time home buyer, the process may seem overwhelming. Here are three rules for first-time home buyers and a basic run-down of everything you need to know to buy your first home.

  1. Get your finances in order

First and foremost, you need to get your finances in order to qualify for a mortgage. You don’t have to have perfect credit in order to get a mortgage, but most loans do have minimum credit score requirements. So it’s not a bad idea to clean up your credit as best as you can.

When lenders consider you for a mortgage, they want to see that your finances are consistent. Keep these things in mind when applying for a mortgage:

  • Don’t quit or change your job
  • Don’t make any major purchases, such as furniture, jewelry, or vehicles
  • Check with your mortgage officer before you move or withdraw any large amounts of money from your accounts
  • Check with your mortgage officer to find out whether you should pay off your debts or collections
  • Don’t use cash for a good-faith deposit, because it’s hard to track
  • Don’t have your credit report pulled too many times, because it can hurt your credit score

Before you get a mortgage, you’ll also have to get all of your documentation in order, including two years of W2 statements, tax returns (if commission or self-employed), 2 months of bank statements, drivers license and social security card. When you apply for the loan, you’ll need to provide all of the documentation to the lender within 24 hours, otherwise your loan closing could be delayed.

  1. Understand your mortgage options

When you talk with a loan officer, he or she can help you navigate all of the available mortgage options. In the past, 20% down payments were required, but programs are available that can help first-time home buyers put down as little as 1% on a 15 or 30-year fixed loan with a low interest rate and no Private Mortgage Insurance (PMI).

Riverbank Finance offers low and no-down payment loans, including government programs, such as the FHA loan, VA loans, and USDA Rural Development home loan. Riverbank also offers a 1% Down Conventional Mortgage, where the borrower only needs a 1% down payment and the lender contributes 2% to give the borrower 3% equity upon closing.

  1. Be ready to close on the house

Knowing the home buying process can help you be prepared so you can close on the house without delays.  After you’ve submitted all of your documentation and your mortgage is approved, you can begin home inspections and the home appraisal. The home appraisal typically costs between $400 and $600, which you’ll have to pay with a credit or debit card before closing.

Once the house is inspected and appraised, you can schedule the closing with your Realtor and the seller. Your loan officer and the title company will work together to finalize the closing costs. Closing costs typically run between 2 and 5 percent of the total price of the home you’re buying. If you are short on funds ask your loan officer about solutions to have your closing costs paid for you. From the application to closing, the process averages between 30 and 60 days (although Riverbank Finance may be able to close in under 2 weeks), and then you’ll get the keys to your new home.

From start to finish, Riverbank Finance can help you purchase your first home. Contact us at (800) 555-2098 to schedule a consultation with one of our loan officers.

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