Financial Information

When you've decided that you are actually serious about buying a home, one of the first things you must do is secure financing.  This is the most crucial aspect of purchasing a home.  Often people think they can contact a lender and get commitment for a loan after they have found the home they wish to purchase.  But actually, just the opposite is true.  One of the first things I will suggest is to contact a lender prior to beginning your serious home search.

Partnering with a Mortgage Lender and getting “Pre-Approved” for a loan, not only determines the price range that you will be able to afford, it also positions you to make a qualified offer on a home when you do find the one you want.

We have a list of Preferred Mortgage Lenders who are very experienced in helping buyers in Southern Maryland.

Getting Started

Start a Finance File

A Finance File should contain all of your important financial documents.  Regardless of the loan type, lenders will need information about you.  Make copies of financial statements - for bank accounts, investments accounts, credit cards, auto loans, recent pay stubs and tax returns.  Commonly, your lender will require the following documentation:
• 2 years of W-2 forms from your employer and 2 years of tax returns
• Recent pay stubs
• Copies of 3 months of bank and money market statements
• Brokerage, mutual fund and retirement account statements
• Proof of other income sources (alimony, trusts, rental income, etc.)
• Credit card statements
• Auto /boat / student / miscellaneous loans
• Drivers’ license or form of ID
• If you’re not a US citizen, then copy of your green card or visa
• Copy of any existing mortgage debts if you are applying for a home equity line of credit or another mortgage

Savings & Debt

If you are buying real estate, try to accumulate funds towards your down payment, closing costs (appraisal, miscellaneous fees, escrow, title insurance, etc.) and expenses such as inspections.  Furthermore, try to pay down existing revolving and high interest rate debt like credit cards.

Set Your Priorities

If you truly desire purchasing a new home, you may have to make some sacrifices.  Now is not a good time to change careers, move your money around, open a credit card, or buy big ticket items.  Lenders like stability.  So if you are considering any major changes, it pays to meet with a lender and ask them how to proceed before you make any changes!  Any change, regardless of how small, could cause a delay in your home purchase or drastically reduce the amount of home you could afford.   

Select a Lender

Today, lenders can be found through a variety of sources.  In addition to calling on ads in the newspaper, you can also find and apply to lenders over the internet and through referrals from your REALTOR.  I would be happy to suggest lenders I have used successfully, who have proven themselves competitive and capable even with problem properties or poor credit.  Click here to access the list of Preferred Mortgage Lenders: ***(Preferred Vendor List)***

Some Factors to Consider in Choosing the Right Lender
• Ability to explain things clearly and return your phone calls in a reasonable time period
• Competitiveness of interest rates, costs & fees
• Availability of loan programs that suit your credit profile and desired property
• Strong local lending reputation for professionalism and success
• Partnering relationship with Realtors and Title Companies

Get Pre-Approved

Is there a difference between "Pre-Qualified" and "Pre-Approved"?

Yes, absolutely!  In today's market one has great value and the other doesn't do much for you.  The pre-qualification process can be completed fairly quickly, based on less information than is required for getting pre-approved.  A pre-qualification letter is an opinion from a lender, formulated from “surface level” data, of the maximum amount of real estate for which you will qualify.  In a competitive seller’s market, an offer from a buyer with a pre-qualification letter most likely will lose out to an offer from a person who is pre-approved.

Benefits of Being Pre-Approved by a Lender

There are several benefits to going the extra mile and getting a pre-approval letter.  First of all, you will know exactly how much real estate you can afford.  Secondly, when you find a property you want to buy, you will be prepared to make an offer immediately.  Knowing that you have gained Pre-Approval from a reputable mortgage lender, the seller will have greater confidence that your offer will result in a sale.  Finally, being pre-approved is more efficient; it reduces the amount of time it will take your lender to fund your loan. 

Additional Financial Information:

Southern Maryland has many properties that qualify for USDA's Rural Financing - which may provide many financing benefits to buyers, including obtaining a loan with no money down.  Our Preferred Lenders can explain this service and help you determine what financing program is most beneficial to you.

Michael Ryan
Michael Ryan
10665 Stanhaven Pl White Plains MD 20695