Preparing to Apply for a Home Loan

If you’re looking to buy a home at the Lake of the Ozarks, chances are you are going to need to finance the purchase. Applying for a home loan requires some preparation, and there are several documents that you will want to gather before starting the home loan process. Keep reading to learn how you can start preparing now. As your Lake of the Ozarks real estate agent, I'm here to help you every step of the way!

Income & Employment Verification 

In order to be approved for a home loan, you will need to provide information on your employment and income. If you collect a paycheck, you will be required to show your W-2 forms from the previous two years. In addition, you’ll be asked to show your most recent pay stub to show that you are still employed and are making at least the same, if not more, amount of money. If you own your own business, you will need to provide a profit and loss statement or 1099 forms. You will also be asked to provide your most recent federal tax return, and possibly the last two years’ tax returns. The lender needs to make sure you can afford your monthly mortgage payments.

Debt Information 

Another important factor in the loan approval process is the amount of debt you have. A mortgage lender will use your current debt information to determine the risk involved with lending you money. You will be asked to provide a complete list of your debts, such as credit cards, student loans, car loans and child support payments, along with minimum monthly payments and balances. Your debt-to-income ratio, as well as your credit history will be evaluated. These factors will be used to determine not only your risk level, but also what interest rates are available to you personally. The better your credit score, the better your rates will be.

Depending on your unique financial situation, additional documentation may be required for your loan application. Talk to a professional mortgage lender to learn more. As your premier real estate agent at the Lake of the Ozarks, I can recommended lenders that I've worked with in the past. For all your home buying needs, trust Eagle's Nest Realty!

Call (573) 374-0769 to schedule a showing today!

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What You Need for a Home Loan

Buying a home is a major step in many people's lives. While it is an exciting time and a big accomplishment, it can also be a bit intimidating to enter the real estate market. The first step to buying a home at the Lake of the Ozarks is to get pre-approved for a home loan. This step can help you establish your information with a lender and get a rough estimate of what you can afford in a home. Eagle's Nest Realty has dedicated this week's blog to show you exactly what documentation will be needed to start the home loan approval process.

W-2 & 1099 Forms

W-2 forms are required for all people on the loan for the past two years. This can help to prove your income and helps the lender figure out how much of a home payment you can afford. If you own a business, a profit and loss statement or 1099 form will be needed, as well.

Recent Paycheck Stubs

Your most recent paycheck stubs will need to be presented for your mortgage loan. This helps to show that you do have a steady stream of income and can prove how much money you make, giving your lender a good idea of how much of a payment you will be able to handle.

Most Recent Tax Return Statement

Your lender will need to compare your tax return statement to a transcript from the IRS to ensure there is no fraudulent activity taking place with your income. All pages and schedules of tax returns from anyone on the home loan will be required.

List of Debits & Assets

A debt-to-income ratio will need to be conducted with your debts and assets. This shows what money you have coming in compared to debts that need to be paid off. Anyone on the home loan will need to provide this information for the lender to get a solid idea of what home loan amount you can handle.

Proof of Rent or Mortgage Payments

Your current housing situation will need to be analysed. Whether you rent or own, canceled checks may be requested from your mortgage lender. This helps to show how much you are currently paying, which is a factor in how much you can afford for your new property.

Now that you've seen what documents are required to get approved from a mortgage company, you're ready to start gathering these papers. A pre-approval for a home loan can help you in a number of ways. From getting a jump start on the loan process to knowing exactly how much you can afford in a home, it's the best way to go when buying a house. Once you get a pre-approval letter from your mortgage lender, you're ready to start your home search at the Lake of the Ozarks. Contact our team of expert real estate agents in Sunrise Beach, MO to get searching today!


Call (573) 374-0769 to schedule a showing today!

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FAQ About Applying For A Mortgage Loan

Almost everyone needs to take out a mortgage when they buy a house at the Lake of the Ozarks (or anywhere else, for that matter). While it certainly works hand in hand with buying a home, taking out a mortgage loan is an entirely separate process in and of itself. You will have to work with a mortgage lender to get a complete understanding of the process, but the team at Eagle's Nest Realty is here to answer a few general questions about applying for a mortgage loan.

What Is The Difference Between An Adjustable Rate Mortgage And A Fixed And Mortgage?
An adjustable rate mortgage (ARM) guarantees a fixed interest rate for a certain number of years, after which the interest rate will adjust to match the current market rate. Conversely, a fixed rate mortgage guarantees a fixed interest rate for the duration of the loan. Because they are fixed for shorter periods of time, adjustable rate mortgage loans typically offer lower interest rates than fixed rate mortgages; however, you run the risk of the rate substantially increasing when it does ultimately adjust. For this reason, adjustable rate mortgages are typically only recommended for individuals who only plan to be in their new home for a few years.

How Much Is Required For A Down Payment?
There is no set down payment amount; how much you are required to provide will depend greatly on the type of mortgage loan you get (which, in turn, depends on your overall financial situation). As a general rule, however, the days of needing to provide 20% down are long gone. Nowadays, some mortgage loans offer as little as 10%, 5%, 3.5%, and even 0% down.

What Determines My Interest Rate?
Interest rates are predominantly governed by the current market, and the way they rise and fall is rather impossible to predict. Currently, interest rates are continuing to hover around near-historic lows. The exact interest rate you qualify for will depend on a couple of different factors, however, such as your credit score and debt-to-income ratio.

What Does It Mean To Be "Prequalified"?
Prequalification is the first step in the mortgage approval process. In order to be prequalified, your lender will ask you a series of questions about your financial situation and will provide you with a verbal statement of the loan amount he/she thinks you will be able to qualify for based on the information you provided.

What Does It Mean To Be "Pre-Approved"?
Pre-approval is the second step in the mortgage approval process. In order to be pre-approved, you must submit all of the required documentation required to provide your lender with a complete overview of your financial situation. Upon reviewing this information, your lender will provide you with a formal written agreement stating the loan amount you have been pre-approved for.

What Documents Do I Need To Provide?
Each lender requires slightly different documentation, but in general you will be required to provide proof of income, assets, debts, and other financial aspects. Examples of the required documents include tax returns, bank statements, and pay stubs. 

What Are Closing Costs?
Buying a home require the careful cooperation and coordination of several different parties. Closing costs cover the fees associated with these various third parties and their services (with the exception of the real estate agents' commissions, as the seller pays these out of the sale price). Typically, closing costs range from about 2-5% of the home's total purchase price.

Buying A House At The Lake? We Would Love To Talk To You!
Located in Sunrise Beach MO, Eagle's Nest Realty is one of the premier real estate agencies at the Lake of the Ozarks. If you are thinking about relocating to the Lake, downsizing, upgrading, or moving to a new home for any other reason, we would love the opportunity to help you make your real estate dreams come true. Visit our website for more information about Eagle's Nest Realty, Inc.!

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