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Tips
For Home Buyers
1) Get pre-approved for
a mortgage before making your offer. When you're
trying to buy a house in a competitive market, your
offer should contain as few conditions as possible.
An offer that is conditional on obtaining financing
is often a deal killer. The seller may accept a
competing offer for less money rather than take the
risk that you won’t be able to raise mortgage money.
A pre-approval letter from your lender tells the
seller you are ready and able to commit.
2) Know when to quit. When you act on emotion,
rather then reason, you may end up paying too much.
This can happen when you fall in love with a
particular house and start fantasizing about how
great it will be. Another reason you may be driven
to pay too much is that a bidding war triggers your
competitive instincts and you must buy the house at
all costs — which you'll regret later.
3) Set enough money aside to cover closing costs
without having to forgo eating for a couple of
months. You’ve put together a down payment. Be aware
that there is also a long list of expenses you may
have to pay at closing, depending on where you live
and who your lender is. Closing costs can add up to
between two and six percent of your loan. We advise
you to ask your lender or mortgage broker to give
you a Good Faith Estimate of the loan-related fees
you’ll have to pay. Get your real estate agent to
compile a list of other expenses.
4) Try to coordinate the date you take possession of
your new home and your moving date. If possible,
avoid a situation where you’ve got to camp out with
relatives or find a short-term rental because you
must vacate your old house or apartment before you
can move into your new digs. Moving once is enough.
5) Insist on having a home inspection. The first
cold day you spend in your new house is way too late
to find out that the furnace doesn’t work. The one
condition you should always include in an offer to
purchase is a home inspection. Find out how much it
will cost to fix any defects and have the seller fix
them before you agree to buy or deduct the estimated
cost from the final price you offer. If the seller
won’t help bear the costs and you want to go ahead
with the purchase, make sure you can afford the
necessary repairs on top of your mortgage.
Application Checklist
Below is a list of documents that are required when
you apply for a mortgage. However, every situation
is unique and you may be required to provide
additional documentation. So, if you are asked for
more information, be cooperative and provide the
information requested as soon as possible. It will
help speed up the application process.
Your Property
Copy of signed sales
contract including all riders
Verification of the
deposit you placed on the home
Names, addresses and
telephone numbers of all realtors, builders,
insurance agents and attorneys involved
Copy of Listing Sheet
and legal description if available (if the property
is a condominium please provide condominium
declaration, by-laws and most recent budget)
Your Income
Copies of your pay-stubs
for the most recent 30-day period and year-to-date
Copies of your W-2 forms
for the past two years
Names and addresses of
all employers for the last two years
Letter explaining any
gaps in employment in the past 2 years
Work visa or green card
(copy front & back)
If self-employed or
receive commission or bonus, interest/dividends, or
rental income:
Provide full tax returns
for the last two years PLUS year-to-date Profit and
Loss statement (please provide complete tax return
including attached schedules and statements. If you
have filed an extension, please supply a copy of the
extension.)
K-1's for all partnerships and S-Corporations for
the last two years (please double-check your return.
Most K-1's are not attached to the 1040.)
Completed and signed
Federal Partnership (1065) and/or Corporate Income
Tax Returns (1120) including all schedules,
statements and addenda for the last two years.
(Required only if your ownership position is 25% or
greater.)
If you will use Alimony
or Child Support to qualify:
If you receive Social
Security income, Disability or VA benefits:
Source of Funds and Down
Payment
Sale of your existing
home - provide a copy of the signed sales contract
on your current residence and statement or listing
agreement if unsold (at closing, you must also
provide a settlement/Closing Statement)
Savings, checking or money market funds - provide
copies of bank statements for the last 3 months
Stocks and bonds - provide copies of your statement
from your broker or copies of certificates
Gifts - If part of your cash to close, provide Gift
Affidavit and proof of receipt of funds
Based on information appearing on your application
and/or your credit report, you may be required to
submit additional documentation.
Debt or Obligations
Prepare a list of all
names, addresses, account numbers, balances, and
monthly payments for all current debts with copies
of the last three monthly statements
Include all names,
addresses, account numbers, balances, and monthly
payments for mortgage holders and/or landlords for
the last two years
If you are paying
alimony or child support, include marital
settlement/court order stating the terms of the
obligation
Check to cover Application Fee(s)
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