How To Get A Loan For A Property

Real estate is a simple industry. You use other people's money, to buy a property, to make money, to pay that person back. The first step is other people's money. There are many ways you can achieve this. There are of course banks and large financial institutions that have almost unlimited money to loan out. There are also local individuals and small businesses that lend peer to peer on real estate transactions.

Today we are going to discuss getting a loan to buy your first property in Pittsburgh. We are going to keep it simple with bank financing, and what is required to actually get the funds too close. Let's say you found your dream home, and you are ready to buy. You will of course need to be pre approved to put in an offer in this market. Once you find a loan officer or bank you'd like to work with you will have to go through an underwriting process.

The bank will require many items in order to determine if you are financially able to pay them back over time. Here is a list of items you most likely will need in order to receive a pre approval.

License

2 years most recent tax returns

Personal Financial Statement

Credit Report

Proof of employment or proof of income

K-1 if you are a business owner

List of all income sources

This is a pretty standard list for buying a house in Pittsburgh. The three things that banks look for when determining if someone is credit worthy is their income, their net worth, and their credit score. They want to know do they make enough income to actually pay this loan back over time? Do they have a strong financial foundation with other assets if they lose the property? And do they have a past of making payments on time?

These are all very important in getting your first mortgage on a property. It is important to work on your credit to look good to a lender. Also, don't ever over leverage by trying to buy a house you can't afford, or taking on excessive debt. Lastly, be aware of what you purchase. The more assets or things that have value or produce income the better! Once you complete your application, you'll wait a few weeks for the lender to look through all these items and analyze what they feel is a safe loan to offer.

If all goes well you should receive your pre approval. Then you can begin the fun part, house shopping!