The Unique Arizona Purchase Experience Preparation to Buy
You will need to know how much home you can and want to afford. Recent changes in the mortgage industry require much more detail in your financial profile. In Arizona, a statement of pre-qualification will be required to accompany the submission of a purchase contract. The "Pre-Qualification Form" (Pre-Qual) discloses to the seller how the lender has determined your qualification. The more documentation that has been provided to the lender, the stronger the Pre-Qual form appears to a Seller. This puts you in a stronger bargaining position against other buyers and gives you peace of mind throughout the process.
Financial Paperwork
To prepare for the loan application, you should have the following paperwork at your disposal
- Most recent 2 years tax returns
- Federal Returns for personal and businesses (if applicable)with all schedules
- All W-2s, 1099's and K-1s (if applicable)
- Most recent paystubs covering 30 days
- 2 most recent statements for all asset accounts with all pages (even if blank)
- All large deposits documented
- Most recent mortgage statement for all properties owned
- Award letter for Social Security and/or Retirement
- Student Loan Deferment and/or monthly statements (if applicable)
- Documentation of any co-signed loans
- Divorce Decree with all pages (if applicable)
- Bankruptcy Discharge papers and Creditor Matrix (if applicable)
- Picture ID and Social Security Card
- Documentation of debts paid by others on your behalf
Credit Report
To complete the Pre-Qual form, a lender is required to pull a Tri-Merged Credit Report (TMCR) from each of the three credit bureaus, Experian, Trans Union and Equifax. A credit score will be associated with each of the bureaus and the lender will use the middle score to determine qualification.
Cost Estimate and Pre-Qualification Form
Once a reputable lender has reviewed the documents you have provided, pulled a TMCR and determined the monthly payment that you are comfortable, you can request an estimated cost breakdown of how much the approximate monthly payment will be as well as how much money you will need to close. That way you can budget your finances once you have purchased your new home.
You will also be given a Pre-Qualification Form that will help you determine the price range of home that you can qualify for and afford. This form will be attached the contract that you will submit to the Seller once you have found a home to purchase.
