Q&A: Paperwork Preparation
So, you’ve found the right home for your family and now it’s time to secure financing. Depending on the type of loan you apply for, the financial documents and other information required by lenders can vary greatly. Your home financing process can be sped up, however, but first you must know what potential lenders will expect of you, and how your financial history will come into play. Bethany Woods of Residential Mortgage (License# AK279796) answers some of routine questions asked by many homebuyers.
Southeast Living: What kind of documents are required when someone is looking to purchase a home, and is it different for a second or third-time home buyer?
Bethany Woods: The documentation required by investors has certainly grown over the last few years. The minimum required is as follows: Paystubs to cover a 1 month period (must be date consecutive), 2 years worth the W-2’s, 2 years of tax returns, and 2 months of bank statements and/or investment accounts. If you are a first time home buyer you will need 3 years of W-2’s, tax returns and 3 months of bank statements. Here are some tips: All pages are required for any financial documents. If your statements say page 1 of 5 and page 5 is blank, we still need it. Secondly, supporting documentation for all large deposits that are not listed from your employer will be required. Be prepared with a copy of the deposit slip and check(s).
SL: How far in advance should a potential home buyer begin collecting these documents?
BW: I suggest that you start gathering these items prior to your prequalification appointment with your lender. In most cases lenders do not require all of it to issue a prequalification letter. You can directly impact your loan process and timeline by being prepared by having these available to your lender when you sign your initial loan documents.
SL: How long does the loan process take from start to finish, and what should I expect from my lender?
BW: The standard loan purchase takes 30 days, whereas some programs require more steps and can take up to 45 days. Lenders are there to help guide you through the loan process and answer any lending questions you might have. I suggest setting a time to call or see your lender to discuss things. If you are a first time home buyer I would take the Alaska Housing class that comes to Juneau once a month. Purchasing a home is a big investment and information is key to making good financial decisions.
SL: How would you compare current home loan interest rates to recent years? Basically, is now a good time to buy?
BW: There are many that would say that you have to time the market. If you are an investor looking to turn property this might be true, but for those looking to purchase a home it is simple – is the time right for you? Purchasing a home is one of the biggest investments people will make. As for interest rates, if you look at rates over the last 25 years we are still experiencing historical lows.
License #AK167729, #AK279796, Equal Housing Lender
* Next month we will talk to Vickie Perry (License# AK195996) of Residential Mortgage (License# AK167729) about the importance of having good credit and how to improve your score.
