4 Key Documents You Will Need to Get Home Loans in USA
Getting a home loan in the U.S. requires more paperwork than it did years prior. In the years leading up to the Great Recession, obtaining a home loan was a relatively easy process. However, as more people foreclosed on their properties after not being able to afford them, the government enforced stricter guidelines for creditors to follow.
The exact forms you need for a home loan depend on your personal circumstances and the type of loan you are applying for. As an example, if you’re looking to fix and flip a property, you probably won’t qualify for a traditional bank loan. Instead, you’ll need to apply for a hard money loan, which requires less paperwork.
Below are five key documents that most people need when getting a home loan in the U.S., whether it’s a traditional bank loan or investment property loan.
1. Your Experience with House Flipping
This is the most important information that you will give when you apply for a loan with First Funding Loans. Proving that you have a successful history with investing, fixing, and selling estate is critical towards gaining approval for your loan. Showing success with this process can trump any other documents as it gives the lender confidence that the loan will be repaid.
2. Proof of Income
Most lenders require proof that you’ll be able to repay the loan. Mortgage lenders typically ask for paystubs from the last month so they can gauge how much money you earn. In terms of hard money, lenders care more about your collateral, which is the property you are fixing up. If you can’t repay the loan, they’ll take the property.
3. Credit History
When purchasing a home, mortgage lenders will usually pull your credit to get an idea of your repayment history. Things like foreclosures and short sales can hinder your chances for approval. Most hard money lenders will look at your credit history, but they are more forgiving towards foreclosures and other hardships.
4. Down Payment
Nearly all lenders require some type of down payment. Again, this depends on the type of loan you are getting, but you can expect to pay some money out of pocket. Generally speaking, fix and flip loans require a down payment of 20-30 percent. This may be hard at first, but as you see returns on your investments, it will be easier to put this money down.
Applying for home loans in the U.S. can be a tedious and time consuming process, but you’ll always have people walking you through each step. If you are interested in securing a loan for a fix and flip project, contact First Funding Loans today. We have flexible terms, minimal paperwork and quick processing times.