Getting Your Financing Ducks In A Row

Published March 27, 2012 by Julie Provenzano

Here's an overview of what buyers should be discussing with their lenders at the onset of the prequalification process. Getting these items in order will streamline the process and limit the surprises. 

At a minimum, a borrower needs to know and convey to their loan officer the following in order to obtain accurate pricing:

  • Credit score
  • Property type
  • Loan amount/down payment percentage
  • Intent to waive or not waive escrows
  • Desire for paying points or no points (as rate and closing costs go hand in hand)
  • Potential close date

At a minimum, a borrower needs to know and convey to their loan officer the following in order to obtain a reasonably solid pre-qualification:   (This list includes but is not limited to the following)

  • Citizenship (US Citizen, PRA (permanent resident alien), work visa, or foreign national
  • Social Security number for credit pull
  • 2 years work history
  • A solid understanding of their pay structure (now and for the last 2 years)
  • A solid understanding of where their money sits (retirement/non-retirement, liquid/non-liquid) as well as deposit activity in each account for the last 60 days
  • If other properties owned, a thorough breakdown of the costs associated with owning each property (mortgage payment, insurance, tax, and HOA)
  • Many nuances to a borrowers profile may trigger the need for a loan officer to analyze tax returns (personal and possibly business returns) and other critical credit documents
    1. Self employment
    2. Commissioned employees
    3. Side businesses
    4. “Other” income sources (dividend/interest, oil/gas royalties, etc.)
Some lenders don’t ask for enough information and “hope” it all comes together later in the process.  Hope is not a strategy. It pays off to ask the hard questions early in the process. If you're considering a purchase in the greater Dallas area, make it a point to call David Chance, Senior Loan Consultant with The Lending Partners for advice on the best loan products to suite your needs and budget. 

David Chance
The Lending Partners

214-217-3564 office
214-632-2304 cell
214-224-0137 efax
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The most important piece of the puzzle