The purchase of a single family home is usually the largest single purchase made by Americans during the course of their lifetime. Before you can purchase a home, it is strongly suggested you look into your ability to qualify for a mortgage to help you pay for the home. There are a number of significant factors taken into consideration by financial institutions when underwriting a mortgage.
Are You Employed?
The underwriters of mortgages at financial institutions are interested in your employment history. They are especially interested in if you are currently employed. If you are self employed, the underwriters may want detailed information about the capacity in which you are self employed. If you are working for a company or business, they are going to ask you questions as to how long you have worked in this position for, and what were your prior positions. It is especially important that you maintain good records concerning your past three years tax returns, bank statements concerning your checking and savings accounts, pay stubs and other material necessary to verify your employment history.
The Down Payment
If you are looking to obtain a conventional mortgage, most banks will loan you up to 80% of the cost of the house. This means you will have to come up with 20% of the funds on your own. In cases where you have a problematic credit history, you may need to put down more than 20% of the cost of the house as a down payment.
Closing Costs
There are numerous closing costs related to buying a home in New York. There are bank fees. There are underwriting fees. There are points payable to the bank. There are attorneys’ fees for your attorney and the attorney for the financial institution. There is the prepayment of taxes on the house. There is the payment of casualty insurance on the house. You will have to reimburse the seller for all of the oil in the oil tank. In addition, there are numerous other types of closing costs. It is estimated that closing costs in New York will run anywhere from $5,000 to $15,000 to purchase a home. You should carefully look into the closing costs with the attorney representing you on the real estate transaction.
Credit Scores
The financial institution will order credit reports for those individuals whose names will appear on the mortgage of the home. You should obtain a copy of your credit report in advance. In the event there is inaccurate information on your credit report, you should immediately take action to correct this. In the event your credit score is not high enough to meet your bank’s requirements to obtain a mortgage, there are a variety of things you can do to boost your credit score prior to submitting a mortgage application.
The Mortgage Loan Application Process
The process of obtaining a mortgage loan can be aggravating for the prospective homeowners. Financial institutions currently are asking for significant amounts of information from a prospective homeowner to determine whether you are a good risk and that you have the ability to repay your mortgage loan. Hopefully this article will open your eyes as to the various areas you should look in before contacting a financial institution and starting the process of trying to obtain a mortgage.
Elliot Schlissel has been representing clients in real estate related matters for more than 45 years. Elliot and his staff of attorneys represent homeowners who are buying and selling homes. In addition, Elliot and his staff of attorneys provide foreclosure legal defense for their clients.
