While you're isolating at home, there are things you can do to help buy a home now or in the near future. Instead of spending time surfing the Internet looking at homes, do the groundwork necessary to be able to purchase the home that you find.
There is a lot of documentation necessary to qualify for a mortgage and to be approved. This part of the homebuying process can be done in advance, long before you even start looking at homes much less finding the one that you want.
- Assemble all documents to make a pre-approval
- Photo ID
- Two months current pay stubs
- Last two years' W2s
- Complete copies of checking and savings statements for last three months
- Copies of statements for IRAs, 401k, savings, CDs, money market funds, etc.
- Employment history for last two years with addresses and contacts
- Proof of commissioned or bonus income
- Residency history for last two years with addresses and contacts
- Assets for down payment, closing costs, and reserves; must provide paper trail
- If self-employed, last two years tax returns, current profit and loss statement and balance sheet; copy of partnership/corporate tax returns for last two years if owning more than 25% of company
- FHA requires driver's license and social security card
- VA requires original certificate of eligibility and DD214
- Other things may be required such as previous bankruptcy, divorce decree
Get pre-approved giving you the confidence
- Determining the amount you can borrow – decreases as interest rates rise
- Looking at "Right" homes – price, size, amenities, location
- Finding the best loan – rate, term, type
- Uncovering issues early – time to cure possible problems
- Creating bargaining power – price, terms, & timing
- Being able to close quicker – verifications have been made
If using a gift as a down payment, construct your gift letter
- The donor's relationship to borrower
- State the dollar amount is a gift and not a loan
- State that no repayment is required
- Signed and dated by the donor and borrower
- Include all contact information
Build your home buying team
- REALTOR® – this person will coordinate the efforts of the other team members to make the transaction move smoothly, without unnecessary delays to close on time.
- Lender* … consider a trusted professional you can meet with face-to-face
- Title company* … guaranteeing the title and closing on time is important
- Inspector* … more than a flashlight and a clipboard
*Your agent can recommend these professionals based on their experience and having worked with them in the purchase and sales of other homes. This can keep you from getting hooked-up with someone that may not be familiar with the type of home, area, or loans that you might be considering.
Additional information about the buying process and things that you can be doing while you're waiting to look at homes can be found in the Buyers Guide.