If you are looking to get a Conventional home loan in Omaha NE there are a few steps before you start. The most important part to any home purchase and home financing is preparing properly before you find a house. Since most buyers only take out a home loan a few times in their life, very few are experts on the process. Following these steps will help make it as smooth and stress free as possible.
#1 – Gather your documentation and information
If you are self-employed we will need two years of your complete federal business and personal tax returns. This includes all schedules. We will require every page of the tax returns no matter how minor the information on those forms. If you are a W2 employee we will need your last two years W2s and your most recent 30 days pay stubs.
For your assets we will need two month complete bank statements or investment account statements. It is important you provide actual bank statements. I know most of us just check our balances online, but for the loan you will have to get actual statements. These are usually available as a pdf on your bank site. We need every page of the bank statement even if the last page is blank.
For your credit report we will pull a complete report when we take an application. But if you have had a recent bankruptcy we will need the complete bankruptcy paperwork and discharge. If you have a current mortgage we will need the mortgage statement. If you own a home that does not have a mortgage debt we will need a copy of the insurance policy.
A lot I know! On my first house, the document gathering was a great time to get my finances organized. I bought a folder for paperwork and to save a paper copy of my online passwords.
#2 – Start a conversation with a mortgage loan officer
Many home buyers wait until the last minute to contact a loan officer for a pre-approval. Maybe they think it would be wasting the loan officer’s time to call before they are ready. Or perhaps, and I certainly understand, they do not want to contact a loan officer too early to avoid solicitations. However a good loan officer should consider themselves a consultant rather than a salesman. Find a good LO and make it clear that you are just doing a bit of fact finding. They should be more than happy to help without any pressure. If you let us know you are in the very early stages and would just like some questions answered we are happy to help in anyway we can.
#3 – Fully disclose everything you can to your mortgage loan officer
It is important to remember a few things when moving forward with a loan. A mortgage loan underwrite is a detailed review of your credit and finances and everything is discovered during the underwriting process. Most loan issues occur when a loan is submitted to underwriting without all the facts. There are a few common items that are difficult to discover initially but will come out in underwriting. If you have a tax lien, pay child support or alimony, or have very recently changed jobs or positions, let the loan officer know. The sooner we know about these the better we can structure a loan plan. If they are discovered in underwriting you risk losing the loan approval and losing that dream house.
#4 – Ask questions. Lots of questions.
I try to keep a list of all the common questions I get from buyers during the loan process. But I’ll not be able to ask them all. If you have a question and do not ask, I’ll might assume you understand it and you may assume it is not important if I did not bring it up. Great communication and asking a lot of a questions helps both during your home purchase. As an added bonus, I love answering questions! Call and ask. Send them over in a long email. Text them to me at all hours. I’ll help.
Here is a great example of the right question saving the day:
A buyer was using his son as a non-occupying co-signer. The loan looked good and we were getting ready to submit it to underwriting. The day before we were going to start the buyer told me that his son was leaving the country for six months and taking a long term leave from work in a few weeks. He asked if that was an issue and it most certainly was. We found a different co-signer and got the loan closed. If he had not asked me that question, underwriting would have discovered his co-signer’s leave just a week before closing and the buyer would have lost the house.
#5 – Have everything in order before making an offer on a home
A home purchase typically takes 21 to 30 days from the time you get a contract to the time we close. It is very common for offers to be made with a few things still needing to be cleared up on the buyer’s income, assets, and credit. The buyer may not quite have the funds needed to close, but plans to have them ready by closing. Or they might be starting a new job and will not get their first pay check right before closing. On credit, often debts need to be paid down or off to qualify. With the speed that real estate moves, many buyers want to get their offer in before all these issues are resolved. With proper plan this can be done, but we highly recommend you get all of these in order before making an offer. It will make the whole experience much better.
The theme here is preparation. Prepare, prepare, prepare. I understand every home buyer just wants the house and the mortgage is an unpleasant necessity. I do mortgages for a living and I cannot wait until the day I do not have one! But as unpleasant as it is, it is necessary for most buyers. It is also likely your largest debt and we need to take some time to get it ready. If you are in Omaha NE and thinking of purchasing a home we can get you started. The earlier the better!