No matter whether you are a Vet trying to buy your third house with lowVArates using your VA loan eligibility or you are a first time home buyer tapping into some down payment assistance program be prepared to show a lot of documentation to get your mortgage.

Take for example your tax returns. In the past, before the mortgage crash of 2007-2008, you could get away with only having to provide 1-2 years of W-2′s and a paystub to prove your income. Today, however, in 2011 be prepared to show the 2-3 years of full tax returns including your W-2′s and at least a couple of pay stubs.

Here is a more thorough list of documents you’ll need to get a mortgage in 2011

• 2 most likely 3 months of bank statements
• At least 2 pay stubs covering the last 30 days of your current employment and showing year to date totals
• 401K, IRA, and Money Market quarterly statements
• If you have had a bankruptcy within the past 10 years, be prepared to show your bankruptcy paperwork. You may not have to if you have been out of bankruptcy for more than 3 years – but have the paperwork on hand just in case.
• Annual award letters from Social Security if you need to use what you make from it to qualify. You will also need to show several months of bank statements that reflect the regular deposits from Social Security.
• If you have had a divorce – even if it is several years old, be prepared to show divorce paperwork – including the settlement papers as well as custody papers. If you had some credit accounts split between you and your ex-spouse and they are responsible for paying some accounts still on your credit report – you may have to show proof that they are making the payments per the agreement.
• Annuity income or other forms of monthly interest income will need to be documented and be prepared to show the statements proving the income will last at least 3 years.
• Similarly to annuity income, if you are receiving any child support or alimony be prepared to show your legal documents to prove that you’ll be receiving that income for at least three years. In the event of child support you may have to provide birth certificates to prove your child’s (children’s) age(s).
• You will need to show proof of your identity – this is typically covered with a driver’s license and a social security card. You may also show a green card if you have one. Check with your loan officer about what forms of ID you may need if you have questions.

A good idea when it comes to starting into the home buying process is to gather this information before you speak to any loan officers. If the loan officer is doing their job correctly they will ask you a lot of questions about your personal financial situation. With your documents on hand you’ll save a lot of time accurately answering questions. You will also be prepared to provide a nice tidy packet of information if and when the loan officer asks for it.

One thing has remained constant throughout the whole mortgage and real estate crash that started in 2006 and still remains a thorn in the US economy is the need to be personally prepared when it comes to buying a home. This is no matter whether you’re trying to take advantage of the super low VA rates and a VA loan, or low FHA rates or Fannie Mae rates and their respective mortgage programs.

Boldly stated, lining up your ducks in a row to buy a home is the most important step to buying a home. Unless you are paying cash, your home purchase journey goes nowhere if you haven’t checked your credit. Below you’ll find the rest of the ducks that you’ll need to line up to start your journey towards being a homeowner.

1. Checking your credit – this step will help you identify any problems with your credit report or credit scores that could stop you from getting approved for a mortgage. With all the issues with identity theft it is not uncommon to think that you have a clean credit report and in reality find out that you have something to fix.

2. Talk to a lender – a lender in the beginning is very important for giving you a sense of what you can qualify for. This stage is called getting prequalified. Lenders can discuss with you your loan program options, give you an idea of interest rates, the amount of down payment that you’ll need and other preliminary information. This step lends itself into the very next step which is getting a pre approval.

3. Get pre-approved – this step involves proving to the mortgage lender that you are capable of paying back the mortgage if they give you one. The way that you show this is by proving your employment status, your income, the debts you have and the assets you have. The documentation for these items are pay stubs, bank account statements, retirement account statements, your credit report, your tax returns and other required tax documents to name a few. Once you submit these to your lender, your lender will review them and let you know exactly if you qualify and for what loan amount you qualify. With this information in hand you are free to start looking for a home.

As previously mentioned, these 3 steps have remained the same throughout the housing crash of recent years. If you get them done ahead of time, it will make your house hunting experience one that you’ll most likely enjoy versus dread.

First up is the appraisal – Unless you are taking advantage of low streamline VA rates (and you have to have a VA loan to do this) you will most likely have the most difficulty getting your refinance approved because of your appraisal. This is especially true if you bought your home within the past 5 years with little or no money down. It’s a good bet that your value has gone down which could make getting a regular refinance a tough road. If you are facing a situation where you have to refinance – don’t let your ego get in the way of “your home” being so nice that it “really” is worth more than your neighbors. The appraisal is based on what homes are selling for that are comparable to yours. If they are selling for less than what you think yours is worth – chances are your value will come in under what you think/want/need it to be.

Home Repairs in Mid Stream – Speaking of the appraisal, you do not want to have home repair projects underway while you are in the process of trying to refinance – unless you are trying to get perhaps a rehab refinane loan for FHA or VA. The appraiser will note the work in progress and they could potentially down grade the value of your home. Also, with unfinished spaces in your home, the mortgage approval could be in jeopardy because no lender wants to put money out there for an “unfinished” home. You will either want to get the work done way in advance or wait until the refinance is completed.

Changing Your Credit Profile – This is a super common mistake many homeowners make as they go for a refinance. If you are in the market for a refinance, you should not do any huge credit changes like making a bunch of new charges on your credit cards unless it is normal for you to do so every month and pay them off. If you don’t do this and you all of a sudden decide to charge a bunch of building materials for example just before you go in for your refinance you will probably be surprise at what happens to your “used to be wonderful” credit score. You will also not want to finance a new car within 3-6 months of applying for a refinance. This can also hurt your scores to the point of it getting in the way of your loan approval.

These are some of the common ways to mess with your chances of getting a refinance approved. Best thing to do is speak to a few loan officers to get their thoughts on your refinance changes. You should also find a real estate agent to give you their assessment of your home’s value. They can get pretty close because they can look up sales near and similar to your home.

With all this in mind, refinancing can be a breeze if you fit nicely into the loan requirements for the program you want.

If you are in the military and you are taking advantage of the low VA rates you should check out using USAA as your homeowners insurance provider to see what options they have. If you are not in the military and cannot use USAA, or if you are in the military and want to check some other insurance providers it is a good idea to make a few phone calls to get some quotes.

Like so many other insurances, there are many options and adjustments to the basic policy, such that you can customize what you get for a price that fits your budget. One thing you will need to keep in mind is that your mortgage company will require you to cover the replacement cost of your home with your policy coverage amount.

Replacement costs are typically covered by the appraisal when you purchase your home. Most insurance companies use the replacement cost found on the appraisal as the basis for the coverage amount. Some insurance companies adjust your coverage amount such that it is under your loan amount by 25%. This will save you money. To find out what you are covered for, you’ll want to ask about the extended coverage amount of your policy.

Another way to save on your policy is to call your insurance carrier or broker where you have your auto insurance. Often if you have multiple accounts you can get a discount on your policy so make sure you ask.

The last way that we’re going to discuss when it comes to getting a new homeowners insurance policy set up is setting the size of your deductible. Your deductible is the amount of money you have to pay into a claim in order to have your insurance company pay out their portion. Typically, the larger the deductible the lower your premium – just like car insurance.

The VA streamline refinance is a wonderful option for those homeowners who can get it as it has very little qualifying requirements to it. For starters, the VA doesn’t require an appraisal on the property as long as you are not trying to refinance to pay off other debt, or if your payment is going to go up (except if you are doing some minor energy efficient upgrades to your property).

In most case you shouldn’t have to provide credit information beyond your mortgage history. You also shouldn’t have to provide income information either.

This was all the good news about this program – now for the catch (and more good news at the end of this post). Given the current state of the housing market as of June 2011, you may have to get your home appraised and you may be asked for your credit report and have to have decent credit scores. You may also have to prove employment and income. Each of these items may be required based on where you live and the VA lender you decide to get your loan with.

The bottom line here: the VA streamline is a great program it is worth looking into it if you are eligible for it and if you are looking to refinance. If you qualify for it there are some perks to the program that you may be interested in.

Perks of the VA streamline program include: the possibility to put off up to two months of mortgage payments, a cash refund of your previous escrow balance, no out of pocket closing costs like you may have had to pay when you bought your home, and the opportunity to borrow up to an extra $6000 for energy efficient home improvements.

There you have it – if this loan is for you and you qualify you ought to be dialing for lenders by now. If you aren’t eligible for this loan but you stuck around to read this then you should be an unknowing Vet’s best friend someday if you pass this information along to them.

It’s always a good idea to talk to at least three different lenders to get a variety of opinions on what you might qualify for as far as home price and mortgage programs go. There are many programs out there. If you are a Vet, you could go with one of the specialty VA mortgages like a VA hybrid loan or a regular VA loan since those loans usually do not require a down payment or mortgage insurance. You could also look at an FHA, USDA or conventional mortgage.

Now down to the question of pre-approval versus pre-qualification. Being pre-qualified is the first step in getting a mortgage. You supply the lender with a basic picture of your finances and they give you an idea of what you might be able to borrow. Getting pre-approved is a much more involved process.

The pre-approval process includes providing copies of your financial documents to the lender, including pay stubs, bank statements, tax returns, credit report and W-2s. You will also have to sign a loan application. From there, the lender will send all this information to their loan underwriters for review. The underwriter will tell you the maximum amount for which you can qualify.

The lender then issues you a pre-approval letter, which may vary from state to state. You then can give this letter to your real estate agent. With the letter, your agent knows in what price range your home will be and can direct you accordingly. The seller can also accept your offer knowing that you aren’t wasting their time. When a seller accepts an offer they basically take their home off the market, so if you aren’t pre-approved it could be a problem for the seller.

After you agree on a sales price and have a signed sales contract, the underwriter will look at all factors in the loan, including the contract, home appraisal, title and deed information, and inspections. If everything looks good, your loan will go into the final stages of approval, where the underwriter will re-check your financial and credit documents as well as verifying your employment. After this, your loan gets approved and you can sign the closing documents.

Don’t forget the added costs of homeownership. You can always buy less house than you qualify for and get a lower monthly mortgage payment so compensate for the added expenses. You don’t want to find yourself in the situation of having a big house but no extra money with which to enjoy life.

1. Look at different specialty loan programs – you can get a mortgage with a lower interest rate by using programs like the VA Hybrid arm or the FHA 1 year ARM. These programs provide an initial lower rate thus a lower monthly mortgage payment for a specified period of time. You will need to fully understand these programs as they can bite you in the backside. For example each of these loan programs will eventually have a higher interest rate than the initial interest rate that you got when you first got the mortgage. There are other programs like buy down programs that could make a difference to you as well. Talk to your loan officer about your options.

2. Improve your credit scores – mortgage approvals and even mortgage programs are dependent on your credit scores. The higher your scores the better interest rates you can get. Likewise, there are some mortgage programs that you just can’t qualify for if your scores are too low. One guideline to keep in the back of your mind – if your scores are below 620 – you need to do some work on your credit and keep renting until you get your scores to rebound.

3. Payoff some debt – having too much debt will lower your chances of getting a mortgage and for sure will lower the amount of money you can borrow with your mortgage. If you have a lot of credit card debt – focus on paying off one card at a time while you make minimum payments on the other cards. As far as a automobile payment the worst thing to do if you are applying for a mortgage is to buy a car just before you apply to buy your home or refinance. If you buy a car, give yourself about 6 months to have your credit score rebound and stabilize.

4. Pay points – paying points is a great way to get a permanent lower interest rate on your mortgage. However you should consider how long you are going to be in your home when you are thinking about paying points. The general guideline is 5 years – if you are planning on staying in your home at least 5 years then you may want to consider paying some points. Of course you will need to have some extra cash ready if you are buying a home to pay points, or if you are refinancing you’ll need some extra equity or cash in the bank. There are also some tax ramifications of paying points which are different in the event you pay points on a home purchase versus a refinance. Make sure that you talk to a tax person in the event that you pay points for your mortgage.

That’s it with these suggestions to lower your payment. If you want to find out what your mortgage payment would be, please contact us.

I have never heard that term before, but what they called “bait rate” is perfect – it is an advertised rate that you see on an advertisement. And the point of the article that I read was pointing out that you will never know your real interest rate until you have a mortgage lender actually qualify your mortgage with pulling your credit and turning in your loan application with all your financial documents to their mortgage underwriter.

While this is absolutely true what they suggested was that one way to avoid getting scammed by a “bait rate” is to go with a lender that you can trust (among other things).

Hmmm, I thought – how do you know if you can trust a lender?

Well, I’m not sure, one way would be to look online at lender review sites like Low VA Rates Reviews to read some testimonials of customers who have used lenders in the past.

Another way to check into the validity of a lender is to look at your local Better Business Bureau website to see if the company your are contemplating working with for your mortgage has a bad rap.

You can also check websites like Yelp and absolutely do a Google search for the company and see what comes up.

Also, ask your prospective loan officer is they have any testimonials or prior customers that they could refer you to.

From a procedural perspective, your loan officer should send you a Good Faith Estimate within 3 business days that covers the facts and figures of the loan program(s) they think will work best for you. Your loan officer should also go over your credit report with you (they don’t have to, but a good loan officer will). If they don’t offer – ask them to.

Picking a lender if all else is equal between lenders might just come down your gut…so trust your gut when picking a lender.

The VA streamline refinance is one great opportunity to those home owners who already have a VA loan if they want to take advantage of record low va rates as well as better than market mortgage interest rates.

The VA streamline refinance – also known as the IRRRL – offers the opportunity for a Vet to refinance their VA loan without having to get an appraisal, or prove their income, or even provide a credit report. Now, these are the strict VA requirements, but individual lenders may put their own twist on their loan qualifying requirements to satisfy their investors and protect their money.

Some restrictions that you may run across are an appraisal requirement. You may also be asked to prove employment and your lender may pull credit on you to determine your credit scores.

Each of these areas could cause you problems from any number of VA lenders. Contact a national mortgage lender like Low VA Rates to see if you qualify for this great refinance program for your VA loan.

To answer this question you must put your question into proper perspective. Are you trying to buy a home using a VA loan, FHA loan or some other loan program, or are you just wondering about making your rent payment for some other reason?

As a person looking to qualify for a mortgage, you will definitely need to keep paying the rent. Often as part of qualifying for a mortgage you may be asked to provide cancelled checks of your rent payments. Typically, if you need to provide cancelled rent checks you will need to show at least 12 months. For mortgage qualifications, housing payments (either as a mortgage payment or as a rent payment) are one of the most important credit requirements. If you make your rent payment or mortgage payment on time qualifying for a mortgage will be a lot easier.

In reference to making your rent payment – if at all possible you want to make sure you make your payment with a check. This is the strongest proof you have of making your payments. Cash receipts and landlord letters are not always accepted.

If you are not trying to qualify for a mortgage you should consider the idea that you have a legal requirement to the landlord to continue making payments. In general, your lease agreement legally obligates you to make your rent payment. If you stop making your payments, you could possibly be evicted. If you have a question about the legalities of your state and your situation then you should contact a real estate attorney licensed in your state to determine your exact legal standing.