Navigating the Mortgage Pre-Approval Process

Image by Precondo CA from Unsplash

Buying your first home can be stressful enough without worrying about whether or not your mortgage loan pre-approval is going to go through. You may not be prepared for the mountains of paperwork that you’ll need to submit before a lender gives you the thumbs’ up. That’s why it’s such a good idea to know the requirements before you narrow down your home search.

Here are the top items your mortgage broker or lender will need in order to pre-approve you for a loan.

1. Proof of Income

W2 employees will need paystubs, IRS 1040 forms, and copies of their W2 form for the last two years.

For self-employed individuals, and small business owners, the burden of proof is higher. In additon to 1099 MISC forms, you may need to submit a letter from your accountant stating that your business is still active and a profit and loss sheet. 

2. Asset Information

In addition to the regular taxable income you are bringing in, the lender will want to see proof of other assets, including savings, investment accounts, and written documentation of a family member’s intent to gift you money.

These assets will let the lender know if you can afford a down payment, pay for the closing costs on the loan, and have enough cash reserves to afford the transition into homeownership.

3. Employment Verification

Lenders want to know not just that you are employed but also that you are stably employed. Thus, they request a letter from your employer to verify your employment status and the salary you’re earning.

Self-employed individuals will need to submit at least two years of their complete 1040 forms in lieu of this verification process. 

4. Credit Information

Before they will pre-approve a loan, the lender makes a hard inquiry into your credit. You will need a credit score of at least 620 to qualify for a conventional mortgage loan or a Federal Housing Administration Loan with zero percent down. The government may approve borrowers for an FHA loan with a score between 580 and 620 if they are able to make a sizable down payment.

In order to qualify for the lowest interest rates available — typically the ones you see advertised — you must have a credit score of at least 760. In some cases, it is worthwhile to defer applying for pre-approval until you can raise your credit score. Why? A lower interest rate can save you tens of thousands of dollars over the life of the mortgage.

5. Personal Information

Finally, the lender will want to verify your identity by requesting copies of your driver’s license, social security number, and signature.

Regular Home Maintenance Can Reduce Costly Repairs

Photo by Steve Buissinne via Pixabay

As a homeowner, it is important to complete preventative home maintenance on a regular schedule. Home maintenance is necessary because it ensures potential problems are identified before they become costly repairs. Not every issue will be caught ahead of time, here are a few common examples of home maintenance issues that could be problematic.

The Leaking Roof

One of the most common home maintenance issues is a roof that starts to leak. A leaking roof can be costly because, if the leak becomes a steady flow, you may need to replace personal property in addition to fixing the overarching issue. It is critical to perform a home inspection to make sure the roof is in a state of good repair during the buying process. While living in your home, the roof should be inspected regularly to look for problems with shingles, tiles and gutters. This ensures that the roof can withstand the routine wear and tear of adverse weather.

A Ruptured Pipe

Ruptured pipes are often a source of home plumbing and maintenance issues. Pipes tend to rupture during the winter when the temperature is especially cold. Sometimes, water and ice expand upon freezing to the point that the pipe breaks. Then, when the water is turned on, it flows out of the pipe and floods the house. To prevent this from happening, turn the ambient temperature up slightly even when you aren’t at home. This will often prevent the water from freezing. Additionally, allowing the faucet to drip during particularly chilly nights keeps the water flowing, making it is less likely to freeze in the pipes.

A Broken HVAC Unit

Most homeowners dread having to replace the HVAC unit; however, routine maintenance will ensure you get as much use out of your HVAC unit as possible. If you hear rattling in the HVAC unit, or when their heat starts to disappear, this is a bad sign. To ensure HVAC units last as long as possible, make sure to replace the filters on time. This will go a long way toward making them last.

Not Sticking to Home Maintenance Schedules

Lastly, the biggest problem many homeowners have with home maintenance is that they simply don’t do it. There is a common saying that you shouldn’t fix what isn’t broken but avoiding regular home maintenance will likely lead to larger repair bills down the road. Follow the advice of the maintenance schedule and make sure the home is taken care of.

Common House Selling Questions and How to Address Them

For those who want to sell a house, it helps to plan ahead as much as possible. By doing so, you can identify potential home selling hurdles and address such problems.

To better understand how to prepare for the house selling journey, let’s take a look at three questions that every home seller needs to consider before listing a residence.

1. What is my home worth?

What you originally paid for your house likely is very different from your home’s current value. Fortunately, a home appraisal makes it simple to receive an accurate property valuation based on the current condition of your residence and various real estate market factors.

A home appraisal report generally can be prepared in just days. To obtain this report, a home seller will need to hire a property appraiser to analyze his or her residence. Also, a property appraiser will evaluate the current state of the real estate market, the prices of comparable residences that recently sold and other relevant housing market data.

Once you receive a home appraisal report, you can establish a competitive initial asking price for your residence. And with this price in place, you may be able to speed up the home selling journey.

2. Is my home an attractive option?

Think about what sets your house apart from others – you’ll be happy you did. Because if you can differentiate your residence from the competition, you may be able to stir up lots of interest in your house as soon as it becomes available.

Oftentimes, it is beneficial to conduct a house inspection prior to listing a home. An inspection enables you to identify any underlying problems with your home. You then can prioritize and complete home repairs based on the inspection results.

You may want to allocate time and resources to bolster your house’s curb appeal too. Remember, your home only gets one chance to make a great first impression on prospective buyers. If you enhance your residence’s curb appeal, you can boost the likelihood that potential buyers will immediately fall in love with your home.

3. How can I maximize the value of my house?

There is no one-size-fits-all solution to promote a house to buyers. Lucky for you, real estate agents are available who can help you craft a custom home selling strategy.

A real estate agent is a home selling professional who understands what it takes to promote a house to the right groups of buyers. He or she will work with you throughout the home selling journey and do everything possible to ensure you can optimize the value of your house.

Best of all, a real estate agent is an expert home selling resource. And if you ever have concerns or questions as you sell your house, a real estate agent can respond to them at any time.

Want to streamline the home selling process? Hire a real estate agent today, and you can move one step closer to listing and selling your house.

How Much Should You Spend on a Smart Home Device?

There is no set amount that a homeowner should spend on a smart house device. In fact, depending on the smart gadgets you purchase, you may wind up spending only a few dollars, or hundreds, on these devices. But if you understand how to shop for smart home gadgets, you may be better equipped than other property owners to find high-quality and budget-friendly smart devices for your residence.

Now, let’s take a look at three tips to help you get the most out of your smart home device spending.

1. Choose Only the Smart Home Devices You Need

Although there are many smart home devices available, it is paramount to select only the ones you need for your house. That way, you can keep your smart home device spending in check. Plus, you can avoid the risk of buying smart home gadgets you ultimately won’t need.

As you try to sort between smart device wants from needs, consider your day-to-day activities. For instance, if you require energy-efficient and economical lighting for your house, you may want to invest in smart light bulbs. Or, if you are concerned about security, a smart home security system may be an ideal investment.

2. Shop Online and at Brick-and-Mortar Retailers

Smart home devices are available both online and at brick-and-mortar stores. If you shop for smart house gadgets from a variety of retailers, you may find some that offer the optimal combination of affordability, convenience, and quality.

Don’t hesitate to ask questions as you shop for smart home devices either. Remember, your goal as a homeowner is to find smart gadgets that can serve you well for an extended period of time. If you ask questions about smart home devices, you can gain the insights you need to make informed purchase decisions.

3. Consider Pre-Owned Smart Home Devices

Smart home device models are constantly evolving, and multiple generations of different gadgets may be available. Keep in mind, however, that an old smart home device model may suit you perfectly at a fraction of the cost of a new version.

Sometimes, you may find pre-owned smart home devices that work great and won’t break your budget. If you search smart home device listings on Craigslist and other online marketplaces, for instance, you may find lots of terrific pre-owned smart house gadgets. If you browse these gadgets closely, you may discover a pre-owned smart home device that corresponds to your budget.

For those who want to buy a smart home device, it often helps to remain flexible, too. If you are open to shopping for smart house gadgets from a wide range of manufacturers, you may quickly find a smart home device that is both expertly constructed and affordable.

Ready to purchase one or more smart home devices? Take advantage of the tips above to shop for smart house gadgets, and find devices that fall in line with your finances.