When applying for a mortgage, there is no way to avoid providing your asset statement. Do not let this and the other hoops you have to jump through when shopping for a mortgage stress you out. Buying your new home should be an exciting process, and an asset statement is but a small hurdle on your way to achieving your dream.
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A surefire way of increasing your chances for approval with mortgage companies in Costa Mesa – Prime Mortgage is creating a professional asset statement. An asset statement is a report, document, or set of documents that educate mortgage lenders on your financial standing and soundness. Examples of assets include real estate, cash, vehicles, equipment machinery, etc.
Asset statements market you to mortgage lenders and document all your economic resources, including your bank account balances (both checking and savings), bonds and stocks you may possess real estate, and machinery. Pension accounts and life insurance policies that are in force are also listed in an asset report. It is advised to list future assets that you may not currently own, e.g., if you have a trust that will be accessible in the future. However, make it clear that the asset is a tentative one.
If you already have an asset statement, consider revamping and updating it, as this is the best way to sell yourself as a good debtor. People lacking financial know-how face an arduous task when preparing an asset statement and may prefer to hire a specialist. There is a wide range of professionals you can rely on to prepare you an asset statement that will win you mortgage approval. Any money you spend on hiring a professional is certainly well spent.
Consider hiring a certified financial planner, public accountants, or financial manager to prepare your asset statement. It is in your best interest to provide an asset statement that is accurate, up to date, clear, concise, and well ordered. Trained professionals know the best way to present your case, as they know what mortgage lenders are looking for in an asset report. This will go a long way in increasing your chances for mortgage approval and other borrowing transactions.
What is the Importance of an Asset Statement?
Asset statements inform mortgage lenders of the economic resources you own and control. They prove your solvency and creditworthiness; this a way of reassuring mortgage lenders that you are a wise investment. Your asset statement will also verify the various sources and regularity of your income.
Why do Mortgage Lenders Require Your Asset Statement?
Lenders are perpetually concerned about securing the credit they extend to borrowers. Asset Statements allow them to assure themselves that you have the money required to complete the buying transaction. If you are relying on some undocumented source of funding, e.g., a gift or donation, to secure your transaction, communicate this to the lender either verbally or on the asset statement.
Mortgage lenders are also legally required to document your creditworthiness and assert that you can meet the financial obligations in your mortgage. Borrowers are protected from unscrupulous and predatory lenders who may saddle them with mortgages they never stood a chance of repaying. Scrutinizing asset statements enables mortgage lenders to insulate themselves from such scandalous accusations.
Mortgage lenders are not only obliged to ensure you can complete a transaction but are also tasked with documenting the source of your money. Asset statements are a conclusive way to analyze and determine your various revenue streams. Your account statements usually indicate the source of cash deposits and banked cheques.
Income from undisclosed sources must be accompanied by verifying documentation if it is to be considered in an asset statement evaluation. For example, start issuing receipts for your cash-only businesses so that when making the cash deposit, it will not be classified as undocumented income.
Further asset statements give mortgage lenders insight into your spending habits and ability (or lack thereof) to maintain savings/emergency funds. Your account statements reveal your financial wisdom, e.g., regular, large, and seemingly impulsive charges on your account.
Do not compromise when preparing your asset statements, as it will speak to your prospective mortgage lender after you leave the room. Ensure that any asset statements you submit to a mortgage lender present you as a capable debtor. Hiring a professional to prepare this financial document remains the best option. However, if you cannot afford to hire a professional, do not hesitate to add any documents you suspect might aid in your loan approval.
