Obtaining a mortgage

Before you begin your search for a home, you need to calculate how much you can afford to spend on a house. The information in this section is provided by Waterfield Financial Corporation, a Denver-area mortgage lender.

Mortgage pre-qualification determines exactly how much you can afford and details how much money you will need for a down payment and closing costs. Pre-qualification will also give you a general idea what your monthly principal, interest, taxes, and insurance payment will be. 

There are many types of loan programs you may qualify for. Your lender will be able to help you choose one that is best suited to your needs.

The lender will need some information about you including:

• Employment history and income
• Monthly debts and obligations
• Amount and source of cash available for down payment and closing costs

When making a loan application you should bring the following items:

• Two-year residency history
• Two-year employment history
• W-2 forms from the last two years and pay stubs for the last 30 days. Requirements are different for self-employed or commissioned applicants
• Copies of the previous two months' bank statements on all checking or savings accounts, stock/bond brokerage accounts, and a copy of certificates of deposits
• Current statements on all revolving accounts including credit cards with name and account numbers of any recently opened credit accounts
• Coupon books on all installment loans
• Complete divorce decree and separation agreements, if applicable
• Bankruptcy papers with discharge form, if applicable
• Copy of fully executed purchase agreement for any home you are selling including a net proceeds sheet from your agent
• DD214 and certificate of eligibility for VA loans

Things to avoid during the loan application-approval process:

• Do not change jobs.
• Do not switch banks or move your money around. It may make the verification process difficult.
• Do not pay off bills. Your loan officer will advise you if it is necessary to pay off bills to help you qualify.
• Do not make any major purchases such as a car or furniture.

How to accumulate a down payment

• Get a gift from an immediate family member including documentation to prove that the money is a gift not a loan.
• Borrow against your 401k or insurance policy. The loan payment will be considered a debt.
• Cash out your 401k. You may be subject to withdrawal penalties and tax payments.
• Sell or borrow against an asset. If you borrow, the loan payment will be counted as a debt.
• Obtain a low point or zero point loan.
• Ask the seller to pay all or part of non-recurring closing costs.
• Ask the seller to carry back financing.
• Consider different loan programs.