Buying a home in Milwaukee is literally a team sport since there are so many tasks, important timelines, documents and responsibilities that all need special care and attention. Besides working with a professional Milwaukee real estate team that you trust, it’s important that the individual players have the ability to effectively communicate and execute on important decisions together as well.
Either way, you’ll definitely want to have the list of approval documents ready once you’ve decided on the right loan officer that you trust will meet your expectations.
Basic Documents For Mortgage Pre-Qualification in Milwaukee
The first step in securing a home purchase loan is to complete a loan application. In this process, you will need to provide your mortgage company with the following documents so that they can run your scenario and determine the amount of mortgage you can afford based on income (DTI), Loan-to-Value (LTV), credit history and employment status:
- Pay Stubs (2-3 months)
- W-2 forms (past 2 years)
- Any information on long-term debts
- Any recent bank statements
- Tax Returns (past 2 years)
- Proof of other incomes if any
- The address and description of the property you are interested in financing.
- The sales contract
During this application process, the Milwaukee lender will be able to order a report on your credit history along with an appraisal of the property that you wish to purchase. This process can take anywhere between 2-6 weeks.
Pre-approval Letters in Wisconsin
A Pre-Approval Letter in Milwaukee will help you in two ways:
- It lets you know how much mortgage you can qualify for.
- It gives you an estimate of what your total housing payment would be.
Submitting a strong “Pre-Approval” letter with a purchase offer will give the seller more confidence about your ability to complete your end of the agreement. It’s obviously a good idea to get your paperwork prepared ahead of time so that the pre-approval process is as thorough as possible.
In order to get a pre-approval letter, you’ll start by filling out a loan application and submitting a few documents for the loan officer and / or underwriter to review. In order to obtain a pre-qualification letter, a pre-approval letter leading to a mortgage, make sure you gather the following information and any of the following documents:
Employment/Income – Along with this request are questions that you should be ready to answer such as:
1. Where are you currently employed at?
2. How long have you been employed there?
3. How long have you worked for that particular industry?
4. What is your annual income?
5. What is your method of compensation?
6. How stable is your income?
1. Do you have any current debts, and if so what are they?
2. What is your minimum monthly payment required to pay these debts?
3. What is the actual amount on monthly payments that you have been putting towards these debts?
4. How much of the total debt amount applies to credit cards and auto loans?
1. What is your bank balance currently?
2. where are you getting the funds to put towards down payment?
The lender must pull up your credit report to review your credit history to confirm that you have in fact did all that you could in getting an accurate credit score.
Loan Origination Process
When it’s time to turn in your application, you can expect to pay a loan application fee to cover underwriting costs of the loan. This particular fee pays for the appraisal, a copy of your credit report, and any necessary fees that may be charged in addition to these. The application is usually non-refundable.
After applying for your Wisconsin loan, usually taking up 2-6 weeks for the evaluation to be completed, you will have a clear view of just about everything, as the lender may ask for additional information, so remember that the sooner you can provide any information requested, the sooner your application process will be.
Once the loan is approved, you will be given a closing date and the lender will go over the closing of the loan with you. As soon as you are done going over the closing you will be able to move into your new and approved home.
Frequently Asked Questions
Below are a few questions that we hope may give you a better understanding on a few required documents.
Why do I have to obtain another Pre-Approval Letter from a different lender when I make an offer on a particular home?
Cross-qualification is imminent in certain markets, especially with bank-owned or short sale properties. Some of the large banks that own homes require any potential home buyer to be qualified with their preferred lender – who is typically a representative of the bank that owns the home. This is one way for the bank to recoup a small portion of their loss on the home from the previous foreclosure or short sale.
In other scenarios, the listing agent/seller prefers to feel safe in knowing the home buyer they’ve selected has a back up plan should their current one fall apart.
What happens if I can’t find a home before my pre-approval letter expires?
Depending on your mortgage program and final underwritten conditions, you may have to re-submit the most recent 30 days of income and asset documents, as well as have a new credit report pulled.
Worst case scenario, the lender may even require a new appraisal that reflects comparables within a 90 day period.
It’s important to know critical approval / condition expiration dates if your real estate agent is showing you available short sales, foreclosures or other distressed property purchase types that have a potential of dragging a transaction out several months.