Four mortgages in four years… First the 90’s beauty, then the 1947 Bungalow, then the Suburbialand house… are we idiots or what?! Every single time we start this process and go to prequalify for a mortgage, I have a small mental breakdown and wonder what in the hell we are doing. That has been my life for the last several days. Plus LC is sick (and me too a little bit) AND we’re getting ready to go on vacation for the first time without her… I am a nervous anxiety bomb and I wish someone would just shoot me with a tranquilizer dart. Since that is unlikely to happen – unless Lane has been sedative shopping – I thought I would give a little rundown of how to prequalify for a mortgage for those that have not done it eighty times in the last half decade, in hopes that it may help alleviate someone else’s stomach-wrenching home buying stress. I’m also sneaking in a teensy glimpse of the house that we have a contract on, just because I really can’t resist.
HOW TO PREQUALIFY FOR A MORTGAGE
The first thing you will need in your home buying adventures is a prequalification letter from a lender. Most of the time when making an offer on a home it is required that you submit prequalification letter with your offer paperwork. If you are prequalified, sellers know that you can actually PAY for what you want to buy and that they aren’t wasting valuable market time on negotiating with someone who can’t get funded.
Second, you need a loan officer. A good one. You will get to know this person intimately. You will have to deal with them daily, several times a day, for 45-60 days. Make sure your loan officer is someone smart, trustworthy, organized, and most importantly, someone you know you can work with. We have had amazing loan officers, and we have had loan officers who Lane would still punch in the face four years later if he saw them on the street. The paperwork and major decision making is hard enough, so get someone to help you through the process and who will not make you homicidal.
Next, get your amazing, non-face-punchy loan officer to send you an Easy App so that they can prequalify you for a mortgage and get you that all-important prequalification letter. Barring any bizarre circumstances (or any terrible credit on your part! But if you have terrible credit, FIX IT before you buy a house!), your loan officer should be able to turn a prequalification letter around to you in the same day that you send the complete easy application.
Usually the order of events is that you find a house you love, write an offer with your realtor, and simultaneously complete your easy app for the prequal letter. Do not just run around applying with different loan officers all over town. It is a “hard pull” of your credit, and it DOES affect your credit score, so take it seriously.
When you get the easy application, the endless document requests and environmentally damning flood of paperwork will begin. Be organized from the start. Set up a special folder on your computer for all of the documents that you will have to send back and forth. Also create a physical folder for all of the paperwork that you will need with you at basically all times. When you download a document, label it with the name of the document and the date.
For example, if your loan officer requests your 2015 tax returns, label them “Kathryn Jones 2015 Tax Returns 9.29.16”. This will make all of your loan docs searchable and much easier to find when you need to resend them, which you most likely will.
Information Needed for your Easy Application
These are the most common questions asked on a lender’s Easy Application to prequalify for a mortgage:
Full name(s) of borrower(s)
Social Security Number(s)
Estimated Credit Score
Two year address history, including address, date you moved in/out, and monthly payment. If you rent, your landlord’s name and contact information.
Two year employment history, including contact info, position held, gross annual income, and bonus/commission details and frequency. *Sidenote: This is one of the many reasons why it is important to not burn a bridge when you leave a job. They WILL contact your previous employer, and while I don’t think that they do much more than actually verify your employment history, a poopy previous boss could delay things by not answering the call, and just being a general jackass. Though no one that we’ve worked for before would be this way………… (read between the dots)
Assets. This includes your bank accounts, retirement accounts, savings accounts, and any other properties owned. *This is also about the time that I become acutely aware of our lack of assets (or my perception of it at least), hence beginning the mental breakdown.
Liabilities. Credit cards, student loans, car loans, etc. BREAK OUT THE PAPER BAG.
And finally, permission to pull your credit report. It is wise to be aware of your credit score ahead of time, and think about things that you do that may affect it. My credit score has always been great, and I was mad when we got the report back from our lender and it had dropped a few points. Well, DUH, that’s because we just bought a car. Car lots will not always tell you, but when they’re shopping rates or whatever the hell they do, they pull your credit multiple times, and each pull is a ding to your score. When we bought the Tahoe back in May, they pulled my credit FOUR times and I had no idea. Fortunately my score is still good and it was not enough of a hit to mess with our loan, but I am very anal about that number and want it back where it was! Point being, stay on top of any moves you make that will mess with your credit, and don’t take them lightly.
And that’s it! Your loan officer will also probably ask the list price of the house that you are trying to buy, so they know what to shoot for. If you get all the info to your loan officer in a timely manner they should be able to get the prequalification letter back to you that same day so that you can submit it with your offer, and next thing you know you’ll be under contract like us!
We randomly went to an open house Sunday before last, and were under contract by the next Saturday. That contract is contingent on the sale of our house, so just that one more little hurdle to get over and we’ll be on our way to another Jones Sweet Home!
I am highly superstitious, but I couldn’t resist just one little sneak peek of the ginormous backyard of the potential new house, and the soon-to-be outdoor mecca that Lane Jones will create out there. Eeeeee so exciting!!!… But in a totally cool, casual, take-it-or-leave-it kinda way, of course!