Someone buying their first home will have a lot of questions. We see it time and time again. Sometimes, those questions get answered by family and friends. Other times they're answered by a real estate agent. But when it comes to the financial side of buying a home, asking a mortgage expert might be in your best interest.
We hear a ton of questions about mortgage loans, and this is a big one. Everyone hears that it's a mountain of paperwork to apply for a mortgage. Yes, it takes quite a bit of information, but it's not insurmountable.
Let's look at the materials first time home buyers need to have ready for that first mortgage application.
- W-2's for the last 2 years
- If you're self-employed bring in full tax returns for 2 years
- Pay stubs for 1 month
- We will pull your credit report for you
- Bank statements for 2 months
- Drivers license
- Child support information (whether you pay out)
- Other income information
- Purchase agreement if you have one
What other questions do first time home buyers have? Here's a look at 5 other questions (and answers) from first time home buyers.
See the embedded video here - 5 Questions and Answers for First Time Home Buyers
Q: Do I need to save a lot of cash?
A: That's a great question and the answer is both NO and Yes. There are a couple of zero down payment mortgage options out there, however, the greater you can put down, the less you need to borrow and you need to think about closing costs. One thing that helps is to start saving a little out of each pay check so it's not as hard on the wallet.
Q: Do I need to be Debt Free?
A: No, but it does need to be under control, debt levels will affect your credit score. A good number to keep in mind is 30%. Keep all credit lines like credit cards 30% or more under the max if you can.
Q: What kind of documents do I need?
A: There are some major pieces of paper that you will need to start the loan process. Two months pay stubs, bank statements, W2's dating back two years. The more prepared you are now the easier it will be when it comes time to get pre-approved.
Q: How important is my credit score?
A: Your credit score is a window into your past and current financial actions. So, it's very important you know what your score is. A mortgage consultant will pull your credit report, and knowing what's on that report will help you know if you're doing the right things and address issues that might keep you from getting a loan.
Q: How do I even begin?
A: Research, which you're watching this video on the internet, so you have already started. Here at AmeriFirst Home Mortgage there are all types of videos, guides and articles that can be found in our first time home buyer resource center.