Home Buyer's Guide- Seattle 2021 - Else

FINANCING Getting pre-approved for a loan is one of the most important steps you’ll need to take. And remember—being “pre-qualified” is not the same thing as being pre-approved. A pre- qualification is just a rough estimate. A pre-approval results in a commitment letter from the lender for the loan amount you qualify for, which is vital to have in our market when you make an offer to purchase. WHAT DOCUMENTS WILL YOU NEED? • A copy of your driver’s license/social security card • Your green card or visa, if you are not a US citizen • Paystubs from the last 30 to 60 days • W-2’s, 1099’s, and tax returns from the last two years • Bank statements from the last 60 days (including checking, savings, 401Ks, mutual funds, etc.) • Divorce decree, alimony agreement, or child support agreement • Bankruptcy papers, if you’ve filed in the last seven years (including a letter of explanation) • Current mortgage statement and other liens or equity lines BE PREPARED BEFORE YOU APPLY

WHAT QUESTIONS TO EXPECT FROM YOUR LENDER? • Are you receiving gift funds? • Do you need to liquidate funds from an investment account?

• How much do you have for a down payment? • How is your credit score? Any current debt? • Can you cover the transaction closing costs (roughly another 1.5% of the purchase price in addition to your down payment)? • What monthly payment are you comfortable with (you may be approved for more than you want to spend)?

WHAT SHOULD I AVOID DURING THE LOAN PROCESS? • Do not change or quit your job • Do not make a large purchase with a loan • Do not co-sign on any loan • Do not use credit cards excessively • Do not miss payments

• Do not omit any debts on your loan application • Do not make any other inquiries into your credit • Do not change banks

Rule of thumb – Continue living the way you live at the time of your loan pre-approval through the closing of your home purchase. A choice that impacts your employment or current financial status could result in your loan being denied in which case the seller may pursue damages in the form of your earnest money.

©2021 Station Cities

Page 7

Home Buyer’s Guide - Seattle