If you are thinking about how to get a Sonoma County Mortgage loan please stop and make sure to read this article in its entirety.

The mortgage loan process has transformed in the last few months and obtaining a Sonoma County mortgage loan is not a simple as it used to be. For illustration purposes I am going to break this down piece by piece so you can be best informed upfront. In obtaining a Sonoma County Mortgage Loan lenders will do a CIA analysis. Credit, Income, and Assets are critical to get the best mortgage rate. These three components support mortgage lending in today’s economic climate.

Mortgage lender’s will always want documentation of income. This is going to be categorized depending on your employment status. If are self employed we will need 1099’s for the last years, a year to date profit and loss statement and business license. If you are a W-2 wage earner and are seeking a mortgage refinance or purchase loan in Sonoma County you are going need to provide 30 days worth of pay stubs to support your current monthly gross income. We as mortgage lenders are going to look at the gross monthly income that you earn to qualify you for a home mortgage. We are also going to ask you for the two most recent year’s federal income tax returns which will further support your gross monthly income in qualifying for a home mortgage loan. The last item we as mortgage lenders are going to look for is your two most recent years W2’s from your current and or past employers. If you receive any other form of documentation rental income, dividend income, pension income, Social Security income, any other source of income will require further documentation and the likelihood of projected continuance for the next 12 months.

To get a Sonoma County Mortgage, you will need assets.

Assets that we are looking for usually are liquid assets that you have in the bank for example bank statements showing funds. In order to get a mortgage loan you will need to provide two months of full bank statements all pages showing proof of funds to close escrow as well as two months of statements for all other asset accounts or the last two quarters depending on the accounts that you have: 401(k)’s and other money market accounts can be quarterly, so we will need the last two quarters. These statements must show enough money for a down payment which must be at least 3.5 percent of the purchase price. If the down payment to purchase a home in Sonoma County is coming from a gift, you will need to have a signed the gift letter as well as a full bank statement showing the ability the giftor actually has the ability to give a gift. In other words when looking for a mortgage loan we will need a full and complete paper trail of the down payment. The relationship also must be a blood relative of the borrower. If there are any large deposits in any of the bank statements provided letters of explanation will be required by the mortgage lender to make the mortgage loan so they can satisfy today’s mortgage guidelines. Your Sonoma County mortgage lender can certainly give you a letter of explanation template which will make this process easier.

In order to get a Sonoma County Mortgage, pulling a current credit report is necessary.

To get a mortgage loan today you must have a credit score of 620 or better. For your information if your credit score is around 620 your mortgage lender is going to require you to provide letters of explanation for any of the past credit delinquencies, past collections, or old charge-offs and certainly any lates that may have been the past. You will need to have three credit scores one from each credit bureau Trans Union, Equifax and Experian. If you have less than three credit scores you will need to talk to your mortgage lender in order to get a mortgage decide what is the best action to take. A good mortgage lender can help you in this regard. You can always call me Scott Sheldon 707 217-4000.

If you have credit scores which are 640 or better you will be a better position to purchase a home than if your credit scores are beneath 640. Generally with regards to credit when getting a mortgage loan you will want your credit cards’ balances to be no more than 30% of the total allowable credit lines. You certainly do not want to have any lates on your mortgage. No mortgage lates or rental payment lates in the last 12 months. If there is a debt on your credit report that it’s not yours you will need to provide from whoever’s debt it is 12 months of canceled checks to prove that the debt is not yours so it can be omitted from your debt to income ratios when qualifying for a Sonoma County mortgage loan.

Lastly and probably most importantly when getting a Sonoma County Mortgage Loan is your debt income ratio and housing ratio. As a mortgage lender when helping a client get a mortgage loan, I like to show them how these numbers work. We take your total housing payment and divide that into your gross monthly income to come up with your housing ratio. Next we take your total housing payment plus any monthly debts that you have like auto loans credit cards etc. and add those items together. Once we have that figure, we divide that into your gross monthly income and that will give us your front-end and backend ratios in other words your housing ratio and debt income ratio. Mortgage lenders require the calculations to be performed in just this way. We usually do not want a borrower to have a front housing ratio of more than 36% of their gross monthly income and a debt income ratio of no more than 50% of their gross monthly income. It varies from client to client, but these are the general calculations. We do calculate these for you.

There are several other things that we look at as mortgage lenders to help you get a Sonoma County Mortgage Loan: including the appraisal of the property, if own any other property, the loan to value, the projected interest-rate as well as the bond market and what the best mortgage rates will be for you.

If you would like further clarification or are seeking a loan today be prepared to provide documentation, potential letters of explanation and remember that getting a mortgage loan today is not an easy however working with me is. I mitigate the process and guide you through the maze of obtaining a Sonoma County mortgage refinance or a Sonoma County Mortgage purchase loan. So if you are seeking a Sonoma County refinance loan and want the best interest rate give me a phone call at 707-217-4000.