Richard Balles tells you what you need to know about Home Loan Qualification

Richard Balles suggests, before you begin looking for a new home, a second home, or an investment property, it is always a good idea to get pre-qualified by your lender (Note: this is different than being pre-approved). At A-K Financial, Richard Balles assist you with this process.

Prequalification:
1. Saves you time – you don’t spend your time looking at homes that are out of your price range.
2. Gives you an advantage in the marketplace – many sellers will only allow their property to be shown to pre-qualified buyers.

Your Credit Score - Value Rating - Paper Rating
720 and up - Superior Rating - A Paper
680 to 720 - Excellent Rating - A to B Paper
640 to 680 - Very Good Rating - B Paper
580 to 640 - Good Rating - Subprime
550 to 580 - Fair Rating - Subprime C
550 and below - Imperfect Rating - C Paper

Here Richard Balles is giving the list for "A" paper (note: different guidelines apply to "B and C" credit)
Conforming loan amount of up to $417,000 – 1st mortgage loan amount only (can also have a 2nd mortgage)
Can be owner or non-owner occupied
If owner occupied, must have 2 months PITI* reserves (Principal, Interest, Taxes, Insurance). This money can be gifted from a friend or relative, but is best if it can be shown as self-saved (seasoned).
If non-owner occupied, must have 6 months PITI* reserves. This money cannot be gifted!
Non-conforming loan amount of $417,000
Can be owner or non-owner occupied
If owner occupied, must have 4 months PITI* reserves (Principal, Interest, Taxes, Insurance). This money can be gifted from a friend or relative, but is best if it can be shown as self-saved (seasoned).
If non-owner occupied, must have 6 months PITI* reserves. This money cannot be gifted!

Sources of PITI funds can be from any combination of these assets: checking/savings, 401K/IRA/SII, stocks/bonds, heloc, and basically anything that can be liquid should the need arise. This excludes credit cards!

Richard Balles tells you about, what you need to know:

• Minimum required documentation for full doc loan (either initial loan or refinancing loans)
Last 2 yrs tax returns
Last 2 years W2/1099 Stubs
Last 2 months asset statements, all pages
Current home appraisal within last 6 months (we "Chase" need to order this appraisal)
Home owners insurance agent’s name & phone number
2 yrs work history in the SAME field or relating to job
2 yrs address history (does not have to be the same address)
3 credit trade lines (credit cards, student loans, car loans, etc): 1 of them at least 24 months old for payment history

if you’ve filed for bankruptcy (chapter 7 or 13)
It needs need to be seasoned at least 2 yrs
It cannot contain any Chase accounts in the bankruptcy, such as credit cards or mortgages
If you’re trying to refinance, current payments to bankruptcy trustee must be made on time and be current prior to pulling money from refinance
No late mortgage payments since filing
Credit Score of 620 (this can vary on a loan amount greater than $417,000, and also depends on the loan program)
2 yrs work history in the SAME field or relating to job
2 yrs address history, does not have to be the same address
3 credit trade lines (credit cards, student loans, car loans, etc): 1 of them at least 24 months old for payment history