Mortgage and Real Estate Information for Borrowers
When we first go into real estate we focused on wholesaling property to owner occupants or other investors and build up our cash so that we didn’t have to go to a bank to get a loan for property we wanted to buy but if you decide that you want to start out getting a bank loan this information will be very helpful to you.
If you owe money and have a below average credit score you may find it difficult to get a mortgage loan. If you have outstanding debt, the lender will inquire about your credit history and debts incurred. The lender will ask if you have any outstanding loans, and if so, what amount do you pay monthly. In other words, if you have car loans, you will need to supply the balance owed and the amount paid monthly toward the loan.
Lenders will ask about credit card debts. If you reply yes, then the lender will ask how much do you pay monthly. Overall, the lender will ask how much monthly do you spend on incurred debts that come from your pretax salary on credit card repayments etc.
You will need to answer questions pertaining to assets, which includes cash on hand. The underwriters will investigate information relating to these questions. For example, they will examine and ask, “What is the estimated amount in your banking account?” How much funds will be available in your account after you have paid closing fees, down payment costs, and other fees applicable to mortgage loans. Do you have a saving account? Do you have any other property? Do you have any equity in those other properties? Lenders also want to know if you have any residual income from other businesses, and dividends from stocks.
The lender will ask how much cash do you intend to apply to the loan. The lender may ask also if the down payment is money coming from your pockets. If the answer is no then the lender will ask where the money is coming from…
Basically, lenders want to feel there funds are protected and if you happen to default on the loan that they can recoup the fund elsewhere.
The loan purpose is of interest to the lender. Accordingly, you will respond to questions relating to the purpose of the loan, which includes, are you refinancing a current home, or are you an innovative buyer?
If you respond to the question pertaining to the loan, letting the lender know that you intend to refinance a current home with the money lent; the lender will ask, “Do you require cash at closing to repay debts? Of course, the question that follows will be, “How much” cash will you need to pay the debts in full?
The lender will require information pertaining of the home’s purpose. Do you intend to use the home for work or dwelling? Is the loan intended to invest in the property?
Type of Property
The mortgage lender will also need to know if the home is duplex, condominium, or single-family housing.
Be prepared to answer these questions when seeking a loan for property. For more information regarding real estate investing be sure to check out our blog by clicking here. We also help those who want to invest actively or passively and to learn more about that click here or call 888-277-2711.