Documents Needed for Mortgage Application [Infographic]

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Unless you’re paying for your house in cash, you will need to authenticate your income and taxes to qualify for a mortgage. To help you get organized before you contact a lender, here are all the documents needed for mortgage applications in an easy-to-share infographic.

Documents Needed for Mortgage Documents Needed for Mortgage Application [Infographic]

No matter what, there are four documents every person needs to apply for a mortgage:

  • Previous TWO Paystubs
  • Previous TWO Years’ W-2 Forms
  • Previous TWO Years’ Tax Returns
  • 2-3 Months of Bank Statements

Furthermore, there is information that you will need throughout the process, so it wouldn’t hurt to have printed on a document (original or otherwise)-

  • Purchase Contract from the seller (if available)
  • Social Security Card Number for all purchasers
  • Home Addresses for the last two years
  • Address of bank branch (possibly on statements, above)

Lastly, there are some documents that will be necessary under certain circumstances such as a freelance job, a divorce, etc.

  • Evidence of Other Income (such as child support, etc.)
  • Divorce settlement papers
  • Balance Sheets (if self employed)
  • Gift Letters (such as parents covering a down payment, etc.)
  • Other Consumer Debts (student loans, credit debt, etc.)

 

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5 Ways to Pay Off Your Mortgage in 2015

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2015 could be the year you pay off your mortgage! Or, even if you have a different New Years’ Home Resolution, you can at least make drastic improvements toward paying off that estate. Here are some different ways to focus your goals and make 2015 a big year for your biggest ever investment.

 

Pay Off Your Mortgage 5 Ways to Pay Off Your Mortgage in 2015

 

1. Visualize Your Goal

Whether you aim to pay off the whole home loan, or just have a lofty goal for the next twelve months, the best way to make it happen is with a visual aid. Create a grid – perhaps even shaped like a house – that you can fill in according to your payments. In the example below, each block on the grid represents $200, and the previous year’s goal was clearly marked. Every time you pay $200 towards your real estate debt, you get to fill in a block. This will boost your own confidence, and motivate you to keep going!

Post the visual somewhere where you can see it every day. You’ll be more inspired to skip the morning latte if you know that money could be going towards a much bigger investment!

 

Pay off Mortgage 5 Ways to Pay Off Your Mortgage in 2015

 

2. Cut Expenses Around the Home

There are plenty of ways to save money by making small cutbacks around the home! Start by simply monitoring energy usage and unplugging electronics that are not being used. Use concentrated cleaners for the kitchen and bathroom! The effort to dilute the cleaners is worth the money you save at the store.

Then, of course, there are other budget cuts that you can decide to make as a family. Cut back how often you eat out. Switch from cable to Hulu+ and Netflix (or just call your cable company and mention switching and they’ll probably throw you a bunch of discounts).

Find out what you can cut back on, and put that money towards the mortgage. You’ll be amazed how fast it adds up!

 

3. Refinance

We did an infographic recently on whether refinancing is right for you! Experts agree that if you are going to refinance your home,  now is the time to act! Interest rates are at historic lows and aren’t expected to stay there for long.

Refinancing can be a hassle. It’s a long process and in the end may not actually end up saving you that much money. But when you consdier that 89% of those who refinanced last year have no regrets about the decsion, you have to figure it’s probably worth the risk!

 

4. Pretend to Refinance

Maybe you bought your home too recently for refinancing to make a signficant difference for you. Or maybe you just don’t want to deal with the hassle! The best thing you can do? Just pretend that you refinanced your home.

Tell yourself that you just switched from a 30 to a 15 year mortgage. You don’t want to be spending more than 25% of your income on the mortgage payment (unless you’re young, wild, and preferably single). But if you can switch to the payments of a 15 year loan, you’ll save a very hefty amunt on interest. It could even be enough to make 2015 the year you finish up those payments altogether!

 

5. Downsize

This option is obviously the most drastic, but don’t gloss over it.

If you’re serious about getting your finances under control in the New Year, and you feel your mortgage debt is holding you back from that, it could be time to move into a smaller home. There are plenty of benefits to downsizing, and you may look back at 2015 as the year you made one real estate choice that changed the course of your financial future!

 

No matter your goal in 2015, we hope these tips help you achieve financial freedom, even from your mortgage payment! Is there another secret you know that we can apply in the New Year?

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Fannie Mae and Freddie Mac Accepting 3% Down Payments (Kind Of…)

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Last week, there was big news that federal home loan organizations Fannie Mae and Freddie Mac were approving down payments as low as 3%. The conventional thought on down payments is that they should be approximately 20% of the total cost of the home. 3% down payments obviously look considerably different.

down payments final Fannie Mae and Freddie Mac Accepting 3% Down Payments (Kind Of…)

 

The reactions were varied. Some people immediately put their gaurds up: Wasn’t it stuff like lower down payments that got the nation into the recession in the first place? But others were excited as this clearly opens the door for more homeownership, which could be the next step in economic recovery.

Regardless of where you fall on the spectrum, there are details and stipulations in the new approval system that you should be aware of to address your qualms.

The loans will be available exclusively to first time home buyers, buyers who have not owned a home in many years (for Fannie), or those with lower incomes than the town median (Freddie).

The loans are an option for those with credit scores as low as 620 (the standard minimum), so long as they had mitigating factors that lowered risk, such as a low debt to income ratio.

Fannie Mae has already begun rolling out their new programs. Freddie Mac, meanwhile, won’t make the new policies effective until March.

If you’re concerned that such low down payments could lead to messy foreclosures in the future, perhaps your prediction isn’t as certain as it may seem. Studies show that those with down payments of 3-5% are just as likely to default on their home as those with 8-10% down, which is already considered relatively normal.  That means about .4% of buyers will default on their loan. This is no more or less financial risk than buyers already take.

Furthermore, since the move from both lenders specifically targets first time home buyers, this could be exactly the move the economy needs to be entirely back on track. We’ve discussed before how 2014 saw the lowest percentage of first time home buyers in almost two decades.

Both companies seem to think that these new, more accessible qualifications will be a very low percentage of their total business. They express confidence that this will serve it’s purpose of establishing more homeowners in a way that is only beneficial to the economy.

“We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers,” said Fannie Mae executive Andrew Bon Salle.

What do you think? Are you excited about more accessibility to become a homeowner, or do you worry about the long-term repercussions? Leave your two cents in the comments below!

 

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10 Great Gift Ideas for New Homeowners

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It’s the holiday season! If you know anyone who bought some digs in 2014, here are 10 great gift ideas for new homeowners. These also double as great housewarming gifts to keep in mind for the future!

 

gifts for new homeowners 1 10 Great Gift Ideas for New Homeowners

Amazon

1.  First Time Homeowners Book – Give the new owner a sense of control by providing an all-encompassing resource. We recommend this book from Dan Ramsey (see link), but there is all kinds of great literature out there. Consider a “For Dummies” book or consult your Realtor for a great selection. About $15

 

gifts for new homeowners 2 10 Great Gift Ideas for New Homeowners

Houzz

2.  Dartboard Cabinet – If your new homeowner friend has a game room, or just a playful spirit, this is the perfect, interactive wall décor! It’s got that mullet factor going for it – it looks sophisticated at first, and then you realize it’s meant to party. About $70

 

gifts for new homeowners 3 10 Great Gift Ideas for New Homeowners

Etsy

3.  Monogrammed Doormat – Nothing says “Welcome Home” like a doormat, especially if it literally says “Welcome Home.” You can even customize the doormat to put the new homeowners’ initials or a personal message. This is a great housewarming gift or holiday present.  $30+

 

gifts for new homeowners 4 10 Great Gift Ideas for New Homeowners

Pinterest

4.  Storage Ottomans – The new homeowner may not realize it yet, but s/he needs more storage! Give the gift of way to store unsightly belongings while elevating the mood of the room.  $50+

gifts for new homeowners 5 260x300 10 Great Gift Ideas for New Homeowners

Brook & Hunter

 

5.  Oddjob Tool Set – Whether you get a compact little tool kit or an all-in-one tool, supply the new homeowner for those little oddjobs that pop up all the time. This is the first time your loved one won’t be able to just call the landlord. About $40

gifts for new homeowners 6 300x217 10 Great Gift Ideas for New Homeowners

Craftsman

 

6.  Tool Tote – As more and more projects come up, the homeowner will wind up with his/her own collection of tools. Make them easy to organize with a convenient, mobile box. About $20

gifts for new homeowners 7 10 Great Gift Ideas for New Homeowners

FlourishForAll

 

7.  Tupperware – Okay, let’s be real, you always need more Tupperware! If you want to go the extra mile, fill the Tupperware set with some food so that your loved one can have home-cooked meals while still getting the home itself organized. Nothing is as comforting as a stocked fridge! About $30.

 

gifts for new homeowners 8 1024x617 10 Great Gift Ideas for New Homeowners

Abrakadoodle

8.  Original Artwork – Please note, this only works if you’re an artist. Otherwise, you can just go buy unoriginal artwork. Either way, there’s going to be a lot of wall space to fill. Give a creative gift. No set price.

 

gifts for new homeowners 9 1024x778 10 Great Gift Ideas for New Homeowners

GalleryHip

9.  Frames – The best way to make new digs feel homely is with pictures of loved ones. If you supply some nice frames, they’ll undoubtedly be filled with your pictures! $10+

gifts for new homeowners 91 10 Great Gift Ideas for New Homeowners

Pinterest

10. Forgotten Item Gift BasketWhat did you realize you were missing when you moved into your house? Were you short on power cords? Were you sick of running to the store for more lightbulbs? Or did you wish someone would just buy all your bathroom necessities for you? Whatever you think is most helpful, put it in a basket!  You Choose the Price.

 

 

What did we forget? Is there a perfect holiday gift for new homeowners that we left off this list? Let us know in the comments below.

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Refinancing Your Home

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Have you thought about refinancing your home? Well, if you haven’t you will probably consider it after checking out this infographic!

Refian Refinancing Your Home

 

Why Refinance?

1. Reduce your monthly mortgage payments.

2. Consolidate credit cards, loans and debt to lower your interest rate.

3. Finance home renovations or extensions by taking advantage of the equity on your existing home.

4. Obtain a home loan with better features such as, redraw facility, offset account, etc.

 

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