Mark Slade - FirstTimeBuyer


When it comes to taking out a home loan with a mortgage broker, you are going to need to be prepared. This means you will need to produce many documents, beginning with tax returns from at least three years before. Lenders will also want to see monthly bank statements, as well as proof of your income and all debts you may have. It’s also a good idea to have sources for any big ongoing deposits you may have.

If youhave family or friendsmaking a downpayment for you, it is important to have a written “gift letter” to document such information for your lender. Otherwise, the amount will be considered a loan and included in your financial analysis. You will needmoney for the down payment, closing costs, at least a year’s worth of taxes, and insurance payments. It is also recommended that you have extra cash because mortgage lenders will want to ensure that you have an adequate reserve. This is in case something in the home breaks and needs to be replaced, or if you lose your job and needmoney tomake payments while you look for new employment. Multiple financial experts have agreed the general rule of thumb for a down payment is around 20%, but you are able to do it with as little as 3.5% in the case of Federal Housing Administrationmortgages. Aconventionalmortgagewith aVA loan, which is available to veterans of the military, is around 5%.


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