By Heidi Bruns
Buying a home for the first time can be stressful. Here are a few steps that can assist you through the process to make it less stressful, especially if it is your first time.
Once you’ve made the decision to buy a home, the next step is to see where your finances are and what you can afford. Knowing the up-front costs of purchasing a home as well as the budget for your monthly mortgage payments will help you calculate how much you need to borrow.
The other part of this is getting your down payment together. Having this information together will help you decide what home you can afford:
•All checking and savings accounts
•Stock, bonds, stock options, 401K value
•Gifts from family
Now you can apply for a loan. The information that you will need to provide to your lender is:
•Name, current address, Social Security number
•Name(s), and work number(s) of employer(s) for the past two years
•Monthly income for you and your co-borrower (Most recent pay stub with year-to-date income, including bonuses, commissions and overtime income for the past two years. This information is on your tax return.)
•If you are self-employed, you will need your last two years of tax returns for the type of business you own: Sole Proprietorship (Schedule C), Partnership (Form 1065), or Corporation (Form 1120 or 1120s) AND the last two years’ personal tax returns (including K-1s)
•Documentation to support credit history problems (if applicable), which can be a written explanation of late payments, bankruptcy (petition and discharge papers), defaults, judgments, and/or liens
•As part of closing, you will need any documents that will verify proof of receipt or deposit for funds, like gifts and trust accounts
•Once you have applied for the loan and are pre-approved, now you can make an offer on a home you’re interested in!
Heidi Bruns is a home loan consultant for Mid-Minnesota Federal Credit Union