Richard Balles tells you what you need to know about Home Loan Qualification

Richard Balles tells you what you need to know about Home Loan Qualification

Richard Balles suggests, before you begin looking for a new home, a second home, or an investment property, it is always a good idea to get pre-qualified by your lender (Note: this is different than being pre-approved). At A-K Financial, Richard Balles assist you with this process.

Prequalification:

1. Saves you time you don't spend your time looking at homes that are out of your price range.

2. Gives you an advantage in the marketplace many sellers will only allow their property to be shown to pre-qualified buyers.

Your Credit Score - Value Rating - Paper Rating

720 and up - Superior Rating - A Paper

680 to 720 - Excellent Rating - A to B Paper

640 to 680 - Very Good Rating - B Paper

580 to 640 - Good Rating - Subprime

550 to 580 - Fair Rating - Subprime C

550 and below - Imperfect Rating - C Paper

Here Richard Balles is giving the list for "A" paper (note: different guidelines apply to "B and C" credit)

Conforming loan amount of up to $417,000 1st mortgage loan amount only (can also have a 2nd mortgage)

Can be owner or non-owner occupied

If owner occupied, must have 2 months PITI* reserves (Principal, Interest, Taxes, Insurance). This money can be gifted from a friend or relative, but is best if it can be shown as self-saved (seasoned).

If non-owner occupied, must have 6 months PITI* reserves. This money cannot be gifted!

Non-conforming loan amount of $417,000

Can be owner or non-owner occupied

If owner occupied, must have 4 months PITI* reserves (Principal, Interest, Taxes, Insurance). This money can be gifted from a friend or relative, but is best if it can be shown as self-saved (seasoned).

If non-owner occupied, must have 6 months PITI* reserves. This money cannot be gifted!

Sources of PITI funds can be from any combination of these assets: checking/savings, 401K/IRA/SII, stocks/bonds, heloc, and basically anything that can be liquid should the need arise. This excludes credit cards!

Richard Balles tells you about, what you need to know:

Minimum required documentation for full doc loan (either initial loan or refinancing loans)

Last 2 yrs tax returns

Last 2 years W2/1099 Stubs

Last 2 months asset statements, all pages

Current home appraisal within last 6 months (we "Chase" need to order this appraisal)

Home owners insurance agent's name & phone number

2 yrs work history in the SAME field or relating to job

2 yrs address history (does not have to be the same address)

3 credit trade lines (credit cards, student loans, car loans, etc): 1 of them at least 24 months old for payment history

if you've filed for bankruptcy (chapter 7 or 13)

It needs need to be seasoned at least 2 yrs

It cannot contain any Chase accounts in the bankruptcy, such as credit cards or mortgages

If you're trying to refinance, current payments to bankruptcy trustee must be made on time and be current prior to pulling money from refinance

No late mortgage payments since filing

Credit Score of 620 (this can vary on a loan amount greater than $417,000, and also depends on the loan program)

2 yrs work history in the SAME field or relating to job

2 yrs address history, does not have to be the same address

3 credit trade lines (credit cards, student loans, car loans, etc): 1 of them at least 24 months old for payment history

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