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Qualifying for a Mortgage

Qualification

Our Qualification process involve an in depth examination of your credit history and financial situation. We will collect and examine your W-2's, tax returns, pay stubs, credit report, and your bank and other asset statements.

The application is usually taken over the phone and this is when the Mortgage Loan Officer also known as a Mortgage Specialist examines your information and where you discuss what you are looking for in a loan then the Mortgage Loan Officer will go over your options with you, including down payment, types of loans you are eligible for as well as the rate and term. It is at this time when we determine the best loan product you are eligible for that best suits your mortgage needs.

The following is a list of documents you should collect and have ready to send to your Mortgage Loan Officer

  • Paystubs for last 30 days
  • W2s/1099s for last 2 years
  • Federal Tax Returns all pages, all schedules for last 2 years
  • Bank Statements for last 2 months – all pages
  • Mortgage Statements on any other properties you own
  • Child Support or Alimony Documentation if Applicable
  • Pension or Social Security Award Letters If Applicable

What the Underwriters look at:

These are very simplified guidelines of what a typical mortgage underwriter will consider when evaluating your mortgage application for a conventional (Fannie Mae) loan.

  1. Debt to income - The ratio of your total debt divided by your total income, the written limit is 36% although 40%-45% is now the unwritten standard. This number is figured on gross income. FHA can go up to about 55% total debt to income ratio.
  2. Income and job stability - 2 year job history is standard.
  3. Assets - Assets are required to be seasoned (in your account for at least 2 months) and enough to cover your down payment, closing costs, and sometimes the first 2 months of mortgage payments.
  4. Loan to Value - (LTV in mortgage language) is the amount you are borrowing divided by the appraised value of the house.
  5. Property appraisal - Underwriters will review the appraisal and will deem the subject property acceptable or unacceptable lend against.

Automated Underwriting

In the past 10 years there has been a major move in the mortgage industry away from human underwriters and to a more subjective way of measuring a borrower. This is called automated underwriting. You have a computer program that makes a decision based on the same basic criteria as above. Your application information is entered into a computer and the software makes a decision as to whether or not to approve your loan. The main difference is that automated underwriting will often use compensating factors such as a high credit score or low loan to value to approve the loan despite shortcomings in other areas of the application.

The bottom line is that due to this automated underwriting system, in many cases we can have you pre-qualified in a much shorter time. Taking your loan from application to closing is a much more efficient and faster process than ever before.

 
Mortgage Network Solutions Branch NMLS ID #767520
Licensed by New Jersey Department of Banking & Insurance
Licensed by the Pennsylvania Department of Banking #20838
Licensed by Florida OFR
Mortgage Network Solutions
 
Debbie Maxwell - Mortgage Specialist
Tel: (609) 890-7171 | Fax: (609) 890-7788