Buying
A purchase file, from the income upwards
Everything about buying is downstream of one question: what can you put in front of an underwriter. Get that right first and the rest is logistics.
A purchase file is assembled in a fixed order, and the expensive mistakes are almost all made in the first fortnight — before anybody has looked at a house. What follows is the order it actually happens in.
- 01
Work out which route you are on
Salary, deposits, a CPA statement, assets, or rent. This decides the programme, the documents, and roughly what the loan will cost — before any of the rest matters.
Two income sources means two routes, and each has to be documented in its own way.
- 02
Assemble the documents before you apply
The list is knowable in advance for every route. A borrower who arrives with it ready is looking at a different timeline from one who is asked for it piece by piece.
Statements have to be consecutive and complete — all pages, including the blank ones.
- 03
Get pre-approved, not pre-qualified
A pre-qualification is arithmetic on what you said. A pre-approval means somebody looked at the documents. Only one of them means anything to a seller.
Ask what was actually verified. A "pre-approval" issued without documents is a pre-qualification with a better name.
- 04
Shop with a number, not a feeling
The affordability calculator on this site names which constraint binds. If it is your debts rather than your income, paying one card down moves the number more than a bigger deposit does.
- 05
Offer, and lock
A rate lock has a length and a cost. If the close slips past it, an extension is a fee. Ask what the extension costs before you need it.
Locks are usually 30, 45 or 60 days. A file that needs a CPA letter is not a 30-day file.
- 06
Appraisal and underwriting
Conditions come back in a list. Answer them in one batch rather than one at a time — the file goes back into a queue after each response.
- 07
Clear to close
The closing disclosure arrives three business days before signing, by law. Read the fees against the Loan Estimate you were given and ask about anything that moved.
Worth knowing
The parts that surprise people
Down payment is not the binding constraint as often as people think
On most files the ratio test binds first. More deposit helps by removing mortgage insurance, not by unlocking a bigger loan.
A gift needs a paper trail
Gift funds are allowed on most programmes, but they must be sourced, documented and usually accompanied by a letter. A deposit that appears without explanation will hold the file up.
Do not open credit before closing
A new card, a car loan or a furniture plan between application and closing changes the ratios the approval was based on, and the file is re-run before it funds.
Do the arithmetic
Three calculators that answer this
- How much house can I carry?Affordability calculatorIncome, debts and ratios to a defensible price range — and which constraint is binding.
- What would the payment actually be?Monthly payment calculatorPrincipal, interest, taxes, insurance, dues and mortgage insurance — itemised, by programme.
- Am I better off renting?Rent versus buyOver a held period, with every assumption on the page and both sides treated the same.
Questions
Buying
How much deposit do I actually need?
It depends on the programme, not on the folklore. Conventional loans start at three per cent for eligible buyers, FHA at three and a half, and VA and USDA at nothing for those who qualify. The larger question is what the deposit does to the mortgage insurance and the rate, which the payment calculator on this site itemises.
Does a pre-approval affect my credit?
A full pre-approval involves a hard credit enquiry, which typically moves a score by a few points and recovers. Multiple mortgage enquiries within a short window are treated as one by the main scoring models, so shopping several lenders in the same fortnight does not compound the effect.
Can I buy while self-employed for under two years?
Sometimes. Two years of self-employment is the conventional standard, but some programmes will consider one year with a strong prior history in the same line of work, and bank-statement programmes have their own seasoning rules. It is a question worth asking specifically rather than assuming the answer.
Or start from the income
The five routes
Demonstration form
Have someone look at it
If this were a working site, this is where the conversation would start.