Getting ready to meet with a mortgage lender can be exciting; you’re one step closer to the home of your dreams. Don’t let the paperwork put a damper on things! Your lender is there to help you through the homebuying process, so you’ll want to assist them as much as possible. The information lenders ask for is vital to getting the keys to your new home, so it is helpful for you both if you come prepared. These are 5 documents you’ll need to buy a home.
1. Paystubs: Your lender wants to see paystubs, award letters for Social Security, and pensions or retirement from the last 30 days. The paystubs are your proof of current income and allow lenders to get an understanding of how much money you’ll have flowing in each pay period. It also lets them know a little bit about your employer or if you are self-employed.
2. Taxes/W2s: Lenders usually require the past 2 years’ worth of tax information, including returns and W2s This is mostly to let your lender know how much you really made, but it also gives them the chance to compare your numbers. Your lender must be able to verify all the assets you have listed on your application, so all your documents must match.
3. Bank Statements: You should provide your lender with at least 2 months of recent bank statements. They need to see that your income is being deposited into your account, as well as whether any additional deposits being made or any significant expenses. If you are receiving additional income from somewhere else, be prepared to show your lender where it is coming from and why. This includes any kind of “gift” you might have gotten from a family member to help you buy a home. Keep in mind that your bank statements will show if you’ve had any “NSF” or Non-Sufficient Funds.
4. Divorce Decree: While asking for your divorce decree might seem unnecessary, it is incredibly important to provide. There might be documentation with a previous last name, which the decree can easily explain. Your lender also needs to see if your name is on another mortgage. If your ex-spouse is now responsible for making payments on the mortgage your name is on, you’ll need to provide either a friend of the court printout or 12 months of cancelled checks to show your ex-spouse has been covering payments from their own account. Your decree will also let your lender know if you are obligated to make or are receiving alimony or child support payments. You only need to disclose how much you receive in payments if you are depending on them to help you qualify for a loan and to make mortgage payments. If you are, you will also need to provide proof of that income being received on time. If you do have an obligation to pay alimony/child support, your lender needs to know how much, as it affects your income. Whether you are receiving or obligated, your lender needs to know how much the payments are for and how long they are to continue. Click here for more information on how divorce can impact your finances.
5. Explanations: This might be the most tedious task, but it will help you and your lender move through the homebuying process much faster. Find and provide your lender with explanations for absolutely everything that impacts your income or credit for the last 2 years. If you do have bank statements showing “NSF,” tell your lender why. Don’t be embarrassed to tell your lender if you lost your job at any point within the last two years, they want to know. If your credit score is not great because of a late payment or an emergency, explain what happened. Every detail you can provide your lender will allow them to help you to the best of their ability.
The documentation you must provide can be overwhelming and time consuming to track down, but don’t feel like you are doing so for no reason. The required documentation will help you get the loan you need. If you’re interested in getting pre-qualified, click here for a more detailed list of items you’ll need. Your lender is on your side and wants to make your homebuying experience as smooth and efficient as possible, so meet with them prepared and ready.
LINTHICUM, MD, November 3, 2017— NFM Lending is proud to announce Christos Bettios, Chief Information Officer (CIO), has been elected to the Residential Standards Governance Committee by The Mortgage Industry Standards Maintenance Organization (MISMO).
The MISMO Residential Standards Governance Committee (RSGC) has 18 representatives, all of whom are elected from companies who are MISMO members. The Committee members typically serve two-year terms, with nine seats up for election every year. According to their website, “The Residential and Commercial Standards Governance Committees report to MISMO’s Board of Directors. The Committees are responsible for administering and overseeing MISMO’s activities specific to the Standards. This includes providing guidance to the MISMO workgroups; establishing and managing the MISMO Reference Model release schedule; conducting oversight to ensure that standards development is occurring in conformance with established policy; and maintaining the architectural consistency of the MISMO Standards.” The committee members will begin their two-year term on Jan. 1, 2018 through Dec. 31, 2019.
“It is an honor for NFM Lending, and for me personally, to be elected to serve on our industry’s technology standards committee and contribute to the significant work of this organization,” said Bettios.
Bettios joined NFM Lending in June 2017 and is a member of the Executive Team. He holds a Master of Science in Information Systems from the University of Maryland and has an extensive background in the mortgage industry. NFM Lending is proud of Christos’ achievement, and wishes him continued success.
About NFM Lending
NFM Lending is a mortgage lending company currently licensed in 29 states in the U.S. The company was founded in Baltimore, Maryland in 1998. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. NFM Lending has firmly planted itself in the home loan marketplace as “America’s Common Sense Residential Mortgage Lender.™” For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Twitter.
As a mid-to-late life homebuyer who is ready to change one’s lifestyle or downsize, finding your retirement home will be different than your previous homebuying experiences. This time, you’ll be looking for a home with a shifted focus on what features you find important. The home you buy needs to meet all your current and, more importantly, your future needs. Use these tips when house hunting for a retirement home.
Location: While previously a significant factor when purchasing a home, this time the location of your home needs to be top priority. Take into consideration that driving may not always be an option or even desirable. You’ll want to choose a place that allows you to easily access all the essential places you care about. Your hobbies and interests, such as the beach, golf courses, pools, etc., should be close and have a minimal commute. Cities have public transportation which allows residents to not even need a car. If your friends and family live in rural areas, perhaps moving closer to them might be another option to avoid commuting.
Single-story Homes: If you are thinking about downsizing, now is the time. A single-story home is ideal for older homebuyers. Eventually, going up and down stairs will become troublesome, and there is always the possibility of needing to accommodate a wheelchair or walker. Stairs, even just a few, can make getting around your home more difficult. If you’d like to buy a two-story home, consider having the master bedroom on the first floor. The rooms upstairs can be used for grandchildren or guests. Whichever way you decide to go, plan for the house that will be best for you later, not just what works for you right now.
Space: Luckily, space is a popular feature in many new homes so it shouldn’t be hard to find. “Open” room concept homes allow for your kitchen, living and dining rooms to flow together. You’ll have less clutter and easier navigation. You should also keep an eye out for larger bathrooms and entryways. More importantly, look for extra-wide hallways and doorways. These will accommodate wheelchairs/walkers and you won’t have to avoid or move around tight spots.
Important Amenities: A walk/step-in shower will reduce some of the risks that accompany using a bathtub at an older age. Instead of having to step over the side of a tub, having a small step or no step at all is much safer and wheelchair friendly. A larger shower will also come in handy if a beach seat or railing needs to be added. Ramps into your home are not only a wheelchair/walker friendly accommodation, but removes the risk of falling from carrying anything up or down stairs, such as groceries. Keep an eye out for kitchens with lower counters and easy to access cabinets. Use a checklist when touring to keep track of what each home has to offer.
Property: Consider a yard that will fit your needs fifteen years down the road. While you might be able to cut the grass, pick weeds, rake leaves, and shovel snow now, that might change. Paying someone to do those tasks for you will get more expensive the larger the piece of property, so factor in the additional costs when making a budget.
Pets: Your pet should absolutely go with you wherever you move, however, some places might have specific pet policies. Be sure to check for any restrictions before deciding on a home, especially if you’re thinking about a retirement community or condo. If you are considering a new home in a multiple story building, be prepared to take your pet on an elevator.
When preparing to take the next step for your future keep some of these ideas in mind. Homebuying is exciting but can be stressful, especially if this is going to be your retirement home. Knowing what to look for and expect will help ease your mind. Thinking ahead by choosing a home that will meet both your current and future needs will save you time, money, and stress down the road. If you’re thinking about a new construction home, you can use these tips as a guide when thinking about layout and design. Here are some additional items to consider if you are a single homebuyer.
If you have a mortgage or are going through the homebuying process, you’ve probably heard of Fannie Mae and Freddie Mac. While the names might be familiar, there’s much to learn about the two biggest players in the housing market. We believe it is important for you to understand their roles in the industry and how they function. Here’s a quick rundown of what they are and what they do.
What They Do: Fannie Mae and Freddie Mac are government-sponsored enterprises, more commonly known as GSEs. Their main function is to assist lenders by providing liquidity, or access to funds. This is done primarily through the purchase of loans from lenders. Lenders provide borrowers with loans for a home purchase or refinance, but they want to be able to do so for as many borrowers as possible. Most loans have a lifespan of around 30 years, but lenders are unable to wait out the lifespan before getting their money back. If they did, they could only help a few borrowers before running out of money. However, GSEs like Fannie Mae and Freddie Mac can make the 30-year commitment. Buying the loans allows lenders to have their money returned right away and lets them engage in further lending to more borrowers.
Here is an example of how this process works: A lender has provided a borrower with a 30-year, $100,000 loan to purchase a home. The lender is now out $100,000 and will have to wait 30 years before being fully paid back. They only had $100,000 to give, so now they don’t have any money to help other borrowers. Instead of taking on the loan, the lender sells it to Fannie Mae or Freddie Mac. Now they can use that money to help another borrower.
Quick Note: You might be wondering what Fannie Mae and Freddie Mac do with the loans they purchase. The two GSEs buy thousands of loans every day, but they don’t need to keep them all. Rather than holding onto all the loans, Fannie Mae and Freddie Mac can sell them to different institutions, such as City Bank or Wells Fargo. Because there are so many loans, the institutions like to buy pools, or collections of loans that have all the same parameters.
How They Compare: While very similar in function, there are some differences between Fannie Mae and Freddie Mac. Fannie Mae was established first in 1938, followed by Freddie Mac later in 1970. They use different Automated Underwriting Systems (AUS): Fannie uses Desktop Underwriter (DU) and Freddie uses Loan Prospector (LP). The two also differ in how they handle student loans, condominium reviews, and self-employed borrowers. However, the two are more similar than different. Both GSEs have set guidelines that every loan must meet before they purchase it, involving aspects such as income, asset, down payment, and credit requirements. They both provide conventional lending, rather than government lending like their competitor, Ginnie Mae. While Fannie Mae used to only offer a Debt-to-Income (DTI) Ratio of 45%, they recently matched Freddie Mac at 50%. Both also have a maximum Loan-to-Value (LTV) Ratio of 97%.
Without Fannie Mae and Freddie Mac, many Americans would be unable to purchase a home. Both are vital to the housing market, making it important that you have a general idea of who they are and their function, especially if you are beginning the homebuying process.
When starting the homebuying process as an individual buyer, there are some unique aspects you’ll face that don’t require as much attention from co-borrowers. While it might seem intimidating, all you need to do is spend a little extra time preparing. These 5 tips for single home buyers will lead to a smooth homebuying experience.
1. Affordability: When buying a home with a co-borrower, there’s usually two sources of income to cover a down payment, mortgage, and other bills. As a single buyer, you must be able to cover costs on your own. Take into consideration every possible expense—maintenance fees, HOAs, utilities, an emergency fund—when deciding on a budget. It’s important to make sure you’ll be comfortable in affording the home you choose. Consider saving more money than if you were to buy a home with a co-borrower. Doing so will provide peace of mind in knowing you can afford your home. For ideas on how to save money for a down payment, click here.
2. Maintenance: While you need to factor fees into your budget, maintenance might require more attention than expected. As the sole homeowner, you’ll be the one to take care of your home. Be confident in knowing you can maintain the home you choose.
3. Safety: Picking a neighborhood is just as important as picking a home. Your home should leave you feeling completely safe and secure, so be sure you choose a neighborhood or community that lets you be completely at ease. For more information about choosing a neighborhood, click here.
4. Choosing a Home: You don’t have to go through the home purchasing process on your own. Single buyers, especially first-time buyers, might feel overwhelmed or have skewed judgement from excitement. Take a family member or trusted friend along when house hunting for a second opinion or to be a voice of reason. They only want what is best for you, so they’ll make sure the home you buy is perfect for you.
5. Thinking ahead: Buying a home is best as a long-term investment, but keep an eye on what your future may hold. Down the road you could find a partner, or your job might need you to relocate. The resale value of the property might be something you should seriously consider. Just because it’s only you right now doesn’t mean the addition of a partner or child is out of the question. It could be worth it to think about going bigger now, even if it is just a spare room. The extra space could come in handy—but only if the addition fits comfortably within your set budget.
The bottom line is simply to do your homework. Thoroughly research what you can afford that leaves you some wiggle room. Talk to your family and friends about their experiences with homeownership, especially if they did so on their own. Realtors are also there to provide information, give their advice, and to answer questions you may have.
By now you’ve probably heard about the latest news in security breaches: the hacking of Equifax. This data breach was extensive, leaving over 144 million Americans compromised. The hackers accessed names, date of birth, addresses, phone numbers, social security, driver’s licenses and credit card numbers. To find out if you were impacted, you can check here. If you were affected—and even if you weren’t—here are some steps you can take to protect your credit.
Freeze Your Credit: This is the most important step you can take to protect yourself. Freezing your credit locks your credit files from anyone who is not a company you are already doing business with. Once you place the freeze, if someone who now has all your personal information tries to apply for credit in your name, the new lender will be denied access to your report. Denial to your report means no credit for identity thieves. You can place a freeze individually with the three credit bureaus or find a service to do all the heavy lifting. There are typically fees for placing the freeze, but Equifax is waiving theirs until November 12th, 2017. To get started by freezing your credit with Equifax, click here.
Get Fraud Alerts: Placing a fraud alert on your credit is another great way to avoid identity theft. A fraud alert adds extra steps for lenders to verify the activity on your account. You can choose from three types of alerts, varying from 90 days to 7 years. Fraud alerts can also be placed on credit and debit cards, which is highly recommended. The best part of this protection is that it’s completely free. Usually when contacting one credit bureau they will contact the others, but be sure to verify so n’t leave yourself vulnerable.
Look at your Credit Reports: Credit reports are records of all your credit history. You are allowed one free credit report from each credit bureau a year. Take advantage of these reports. Checking your credit report every couple of months will provide you the chance to catch any suspicious activity. Click here for more information on credit reports.
Other options:If you want to take any extra precautions, there are a couple more options. You can monitor your credit by enrolling with a credit monitoring company. Equifax is offering their credit monitoring service free of charge for a year. Another suggestion is to be on your toes during tax season. Identity thieves could file taxes in your name before you have the chance to file. To avoid this potential issue be sure to file your taxes early.
An event like the Equifax hacking can have unfortunate consequences, but there are steps you can take to protect your credit and your personal information. If you are affected by a security breach of a company or government entity, your ability to open credit or obtain a mortgage is not impacted unless your credit is ultimately compromised by the breach. Be proactive! If you have any questions about the Equifax data breach, or about protecting your information, reach out to a financial advisor. For more information about this topic, be sure to check out this interview with General Counsel at NFM Lending, LaTasha Rowe.
If you are looking to buy a home, the process may seem overwhelming. Planning well in advance can save you time, money, and stress. Whether you’re ready to start preparing or just wondering about the home buying process, we’ve created a list of important steps to lead to a smooth home purchase:
18 months before your home purchase
Check your credit score: Each of the credit bureaus – Experian, Equifax and Trans Union – offer one free credit report a year. Check your report for any errors and dispute them if you find any. This free credit report does not include your actual credit score; a payment is usually required to see your FICO score. Check your score, and if necessary, meet with a financial advisor to improve them. To secure the best interest rates, you’ll want a score over 700. To request a free credit report or for more information, click here.
Downsize living expenses: Eliminate as many monthly debt payments as possible. Doing so will only increase your borrowing capacity. Pay off and consolidate as much of your consumer debt (credit cards, student loans, auto loans, etc.) as you can prior to applying for a home loan.
Consider where you want to live: This is an important factor you’ll face when it comes to preparing to buy a home. The location you decide on will impact the type of home you choose, cost of living, the social scene, and even access to public transportation. Take into consideration everything that is important to you in a new location. Make sure you can see yourself living there for years to come.
Create a budget and savings plan: Now that you have an idea of where you want to live, you can make a budget. Determine how much you will have left after all your monthly expenses for mortgage payments, homeowners’ insurance, home repairs, and other housing-related expenses. See how much properties are selling for in your ideal location. This will give you an idea of how much you will need to save for a down payment. It’s a good idea to have saved at least 3-5% of the sales price of a home in your price range. For example, if you want to buy a $300,000 home, plan to save about $9,000-$15,000. Regardless of your budget, it’s never too early to start saving!
12 months before your home purchase
Meet with a lender: It is best to learn how the mortgage process works early on, especially for first-time buyers. Your lender is there to ensure you have all the information you need. Even if you have gone through the home buying process before, be sure to ask your lender for a checklist of items to take care of ahead of a home purchase.
Learn the market: Now is the time to hire a real estate agent.* Your lender should have some suggestions of realtors if you don’t know where to start. Your agent is there to represent you and will provide you with vital information about the market. Ask your agent if they can set you up with email notifications of new houses that hit the market in your budget or preferred neighborhood. Even though you are not necessarily pulling the trigger yet, when it is time you will know what your home buying power is and exactly where you want to move to. Keep in mind that you’ll be working with your agent for a while, so make sure you choose someone you trust. For more information about choosing a real estate agent, click here.
Gather your documents: The lender will typically require two years of information. While this can be a tedious process, it is vital. To stay organized, create a secure folder on your computer to save all your pay stubs and bank statements, in addition to tax returns and W-2 forms.
6 months before your home purchase
Learn how to break your lease: Your current lease might not end when you are ready to move into your new home, so it is important to find out your break lease terms and month to month terms with your current landlord. Having some flexibility on your lease is helpful and knowing your exact parameters can take off some of the pressure. That way you are aware of and prepared for any fees or having to find a new tenant.
Learn the tax implications of buying**: Owning a home may considerably lower your taxable income. This typically allows you to claim less on your withholdings. Be sure you know what changes will occur so you know what to expect when tax season comes around. For more information about how home ownership will affect your taxes, click here.
Simulate a mortgage payment: To make sure you’ll be able to afford having a larger monthly living expense, live as though you are already paying your budgeted mortgage payment. For example, if your rent is $1,500 and you can afford $2,000, pretend you are currently paying $2,000. See how this impacts your normal budget so, if needed, you can make adjustments.
Send your lender updated documents: Keep your documents updated! The home buying process takes time and it is likely you’ll have a document or two to add or change. If a new tax return was filed or a new W-2 was given, be sure to send these items to your lender as soon as possible.
3 months before your home purchase
Know your buying power: When you are very close to buying, you should know your numbers to get to the most important part of buying a house—your mortgage amount. You’ll need to provide your lender with numbers such as how much you have for a down payment, your debt-to-income ratio, and your assets in order to get pre-approved. Once your lender has these numbers, they will pull your credit and identify the loan type and amount that you qualify for. Once you know what your price range is you can finally start looking at houses.
Look closely at houses: At this point you may be able to officially begin the home buying process. If you love something that you see online or that you drive by, contact your agent to arrange a visit. Take full advantage of the visit by taking note of what you like and dislike. Do you like the neighborhood? Is it conveniently located to places of interest? What is the traffic like? Touring will also allow you to get a feel for what kind of house you can expect to find in your price range. Be prepared to tour a lot of houses! It can take a while before you find the place you want to call home.
* NFM Lending is not affiliated with any real estate companies. You are entitled to shop around for the best lender/real estate company for you.
** NFM Lending is not a Financial Advisor or Tax Consultant. Please make sure to consult your own Financial Advisor or Tax Consultant regarding the use of your personal tax refund.
LINTHICUM, MD, May 24, 2017—NFM Lending is proud to announce that it was named a Top Mortgage Industry Employer by National Mortgage Professional Magazine. This is the third year in a row that NFM Lending has received this honor.
Each year, National Mortgage Professional Magazine distributes a survey to employees of mortgage industry workplaces. The survey analyzes a variety of factors that employees find most important, including compensation, management, training resources, and company culture.
NFM Lending prides itself on its exceptional culture. The company fills the employees work environment with encouragement and teamwork, building a positive workplace that rewards both commitment and performance. Employees are also encouraged to voice their questions and concerns directly to management so that they can be addressed promptly and correctly. Managers often surprise staff members for their birthdays, and the company holds contests, holiday celebrations, and other initiatives to encourage collaboration and show employees their appreciation.
In addition to this most recent award, NFM Lending has been recognized many times for its exceptional company culture. In 2017, it was named one of Mortgage Executive Magazine’s Top 50 Best Companies to Work For for the fourth year in a row and one of the Top 100 Mortgage Companies in America 2016. Also, in 2016, it was named one of the Washington Post’s Top Work Places in the Washington, D.C. area for the second year in a row. NFM Lending is proud of these accomplishments and looks forward to another successful year.
About NFM Lending
NFM Lending is a mortgage lending company currently licensed in 29 states in the U.S. The company was founded in Baltimore, Maryland in 1998. They attribute their success in the mortgage industry to their steadfast commitment to customers and the community. NFM Lending has firmly planted itself in the home loan marketplace as “America’s Common Sense Residential Mortgage Lender.™” For more information about NFM Lending, visit www.nfmlending.com, like our Facebook page, or follow us on Twitter.
Location: While previously a significant factor when purchasing a home, this time the location of your home needs to be top priority. Take into consideration that driving may not always be an option or even desirable. You’ll want to choose a place that allows you to easily access all the essential places you care about. Your hobbies and interests, such as the beach, golf courses, pools, etc., should be close and have a minimal commute. Cities have public transportation which allows residents to not even need a car. If your friends and family live in rural areas, perhaps moving closer to them might be another option to avoid commuting.
Single-story Homes: If you are thinking about downsizing, now is the time. A single-story home is ideal for older homebuyers. Eventually, going up and down stairs will become troublesome, and there is always the possibility of needing to accommodate a wheelchair or walker. Stairs, even just a few, can make getting around your home more difficult. If you’d like to buy a two-story home, consider having the master bedroom on the first floor. The rooms upstairs can be used for grandchildren or guests. Whichever way you decide to go, plan for the house that will be best for you later, not just what works for you right now.
Space: Luckily, space is a popular feature in many new homes so it shouldn’t be hard to find. “Open” room concept homes allow for your kitchen, living and dining rooms to flow together. You’ll have less clutter and easier navigation. You should also keep an eye out for larger bathrooms and entryways. More importantly, look for extra-wide hallways and doorways. These will accommodate wheelchairs/walkers and you won’t have to avoid or move around tight spots.
Important Amenities: A walk/step-in shower will reduce some of the risks that accompany using a bathtub at an older age. Instead of having to step over the side of a tub, having a small step or no step at all is much safer and wheelchair friendly. A larger shower will also come in handy if a beach seat or railing needs to be added. Ramps into your home are not only a wheelchair/walker friendly accommodation, but removes the risk of falling from carrying anything up or down stairs, such as groceries. Keep an eye out for kitchens with lower counters and easy to access cabinets. Use a 
Property: Consider a yard that will fit your needs fifteen years down the road. While you might be able to cut the grass, pick weeds, rake leaves, and shovel snow now, that might change. Paying someone to do those tasks for you will get more expensive the larger the piece of property, so factor in the additional costs when making a budget.
Pets: Your pet should absolutely go with you wherever you move, however, some places might have specific pet policies. Be sure to check for any restrictions before deciding on a home, especially if you’re thinking about a retirement community or condo. If you are considering a new home in a multiple story building, be prepared to take your pet on an elevator.