For most people, the fun part of looking for their next home is seeing what the different houses and neighborhoods are like. The streets of Highland Park don’t remotely resemble the neighborhoods of Atwater Village. Nice as it is, however, it still requires a bit of effort.

But the real job, and the thing that has the most financial impact toward your goal of buying a home in Northeast Los Angeles, is getting the financing right. It helps to at least be prequalified for a loan before you make an offer, and better yet, before you even look.

• Reasons for prior approval – If you’re looking for a home in Mt. Washington, Garvanza, or Eagle Rock and find something that’s a good price, you know the competition can be high to get your offer accepted over other bidders. So it’s in your best interest if your agent can say, “buyer is pre-approved.” If the seller is motivated (ie, wary of waiting a few weeks to find out that the highest bidder can’t qualify for a loan), he might opt ​​for a lower offer from a buyer who appears to be stronger.
• What the skeptics say – A pre-approval is not a certainty that you will get the mortgage, much less at a particular rate and set of favorable terms. The process of getting pre-approved involves minimal paperwork just to get you started, so you know you’re “in the ballpark.” Identify a price range that is appropriate for your income level and likely a credit check that would identify “red flag” issues. But because the documentation requirements for housing have become much stricter in the last decade (after the 2008 financial crisis), it will be necessary to provide tax returns from previous years and answer questions about sources of income (eg. g., “What was the source of this $30,000 deposit last month?”).
• How to do it – Gone are the “undocumented” loans that existed before 2008. That’s probably a good thing, given that most homebuyers want to be able to keep their homes, enjoy their time there, and build asset value over time. for years to come The documentation you will need is: Proof of income (W-2 statements, most recent pay stubs, and proof of any other sources of income, such as alimony, bonus payments, royalties, or residuals); employment verification (with a phone call to your employer and possibly the most recent previous employer); proof of assets (investment account statements, savings of any kind, appraisals of property you already own, and, if you’re getting down payment assistance from a family member or friend, a letter saying it’s a gift and not a loan) .

Lenders generally give the best interest rates to people with a credit score above 740; that’s true whether you’re shopping in Hermon, Glassell Park, or Highland Park, as well as anywhere else in Northeast Los Angeles. But if it falls below that, it doesn’t mean you can’t get a loan. It simply means that you may have to settle for less favorable terms.

Please note that with self-employed individuals, the requirements for income documentation are significantly higher. People considering going out on their own are strongly advised to get a mortgage and buy a new home that they think they can afford before taking that step.

A NELA real estate agent with experience in housing transactions and the loan process can provide referrals to mortgage lenders and brokers, and show you homes that might be of interest to you.