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Securing A Mortgage - Florida Real Estate Places

Securing A Mortgage

Expect the lender to conduct a detailed review of the borrower's income and asset documentation for both U.S. residents and foreign buyers. However, a foreign buyer is required to establish a bank account in the United States and make a deposit of the down payment amount into that account in order to obtain a mortgage. The interest rate will be slightly higher with a foreign buyer than for U.S. residents, and like U.S. residents, foreign borrowers are charged closing costs on a mortgage, which will include lender and third-party fees. Mortgage lenders are also tougher on a second-home loan application than on a primary home loan. The second-home loan rate is traditionally one-quarter to one-half point higher than those for the first residence, and the same is true for origination points. 

WHY CREDIT VERIFICATION MATTERS

Lenders need to be comfortable that you can repay the loan. Your credit profile helps them assess:

  • Your likelihood of making timely payments

  • The interest rate and loan terms you’ll qualify for

  • Whether additional conditions (such as a higher down payment) are needed

Home Buyer Mortgage Expenses - Florida Real Estate Places

CREDIT REPORT AND SCORE CHECK

HARD CREDIT PULL

  • When you officially apply for a mortgage, lenders will perform a hard credit inquiry (hard pull) from one or more of the major credit bureaus (Equifax, Experian, TransUnion).

  • A hard pull gives the lender a full credit report with your credit score, payment history, debts, credit utilization, bankruptcies, and other credit data.

  • This hard inquiry can slightly lower your credit score (typically a few points) and appears on your credit report.

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SOFT CREDIT CHECK

  • Before a formal application, some lenders or brokers may run a soft credit check to pre-qualify you or estimate rates without harming your credit score.

  • Soft checks don’t affect your score but give the lender enough info to pre-pre-approve or estimate which loans you may qualify for.

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​📌 Tip: Mortgage SHOPPING is treated as a single credit inquiry if done within a ~45-day window — hard inquiries from multiple mortgage lenders grouped together won’t hurt your score as much.​​​

When lenders verify your credit, they’re focused on several key factors:

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CREDIT SCORE

  • Minimum credit scores vary by loan type:

    • Conventional loans: typically 620 or higher.​

    • FHA loans: lenders may accept lower scores (some as low as ~580, depending on other factors).

 

PAYMENT HISTORY

  • On-time payments are crucial — late payments, collections, or charge-offs signal higher risk.

 

CREDIT UTILIZATION

  • This is the percentage of available credit you’re using (balances vs limits). Lower utilization usually improves your credit profile.

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LENGTH AND MIX OF ACCOUNTS

  • A longer credit history with a mix of credit types (credit cards, installment loans) generally strengthens your profile.

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NEW INQUIRIES

  • Many recent credit inquiries or new accounts can signal risk and may weaken your score.

CREDIT VERIFICATION PROCESS

Credit checks and verification are part of a full underwriting review, which also includes:

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CREDIT SCORE

  • Income verification (pay stubs, W-2s, tax returns)

  • Asset verification (bank/investment statements)

  • Debt-to-Income ratio calculations
    All of these together decide approval and terms.    ​

VERIFICATION OF CREDIT

Through-out this entire process your mortgage lender will be verifying your past and current credit and will re-verify this information again just prior to closing, so here are some important factors to remember:

  • Do not change employment without first consulting your mortgage broker/banker.

  • Avoid adding new charges to your credit cards prior to closing.

  • Do not take out any additional loans prior to closing.

  • Be sure to make all monthly debt payments by the due date.

WHAT LENDERS LOOK FOR IN CREDIT

NEEDED FOR MORTGAGE

When buying a home in the United States you may be asked to provide the following documentation to establish sufficient income for a mortgage (documentation will vary depending upon whether you are a domestic buyer or a foreign national buyer):

  • Two forms of identification

  • Application fee (cost of appraisal and credit report)

  • Legible sales contract signed by both Buyers and Sellers

  • Social security number of all domestic applicants

  • Complete address for the past 2 years (including name and address of landlords)

  • Name, address, and all income earned from all employers for past 24 months

  • Copies of previous two years W-2 forms

  • Copy of most recent year-to-date pay stubs

  • Loan documentation showing name, address, account number, monthly payment and current balance for: installment loans, revolving charge accounts, student loans, mortgage loans, and auto loans

  • Three months bank statements showing name, address, account number, and balance of all deposit accounts, including checking accounts, saving accounts, IRA's, stocks, or bonds

  • If you choose to include income from child support/alimony, bring copies of court records of canceled checks showing receipt of payment

  • For foreign nationals, reference letters from your foreign bank

  • B-1 pr B-2 visitor's visa (depending on nationality)

  • Passport

Foreign buyers often pay cash as it is a much easier and quicker process for them rather than securing a mortgage. However, when trying to secure a mortgage a foreign buyer should expect to make a 30% down-payment.

HOME BUYER MORTGAGE EXPENSES

  • Appraisal: A supported, written estimate of the value of the property as of a given date.

  • Courier Fees: Fees for express mailing loan packages.

  • Credit Report: Financial report on the borrower.

  • Discount Points: Percentage of mortgage amount to adjust interest rate as required by the lender.

  • Doc Prep Fees: Document preparation and administration fees as required by the lender.

  • Doc Stamps on Deed: Florida Tax required on the total purchase price of the home.

  • Doc Stamps on Note: Florida tax required on executed notes whether a new or assumed mortgage.

  • Home Inspection: To flush out any existing or potential problems on major systems of the home such as electrical, plumbing, air conditioning, heating, or roofing, and also on appliances being conveyed in the transaction.

  • Homeowners Association Fee: Monthly, quarterly or yearly homeowners service assessment fee.

  • Homeowners Warranty: Home protection coverage on major systems and built-in appliances.

  • Intangible Tax: Florida tax required before a mortgage is recorded, except on an assumed mortgage.

  • Mortgage Assumption Fee: To transfer the loan into buyer's name

  • Mortgage Insurance Premium: Insures the lender for amounts in excess of 80% against borrower's default.

  • Origination Fee: A fee to lender to originate the loan.

  • Recording Fees: For recording the closing documents at County Recorder's Office.

  • Survey: To outline exact boundaries of the property and search for encroachments.

  • Tax Service Fee: Fee for handling the payment of taxes to the proper taxing authorities.

  • Termite Inspection: To determine if the home has infestation of termites, powder post beetles, or other wood destroying organisms or fungi.

  • Title Insurance for Lender: An insurance policy for the lender guaranteeing a clear and marketable title.

  • Underwriting Fee: A fee charged for underwriting the loan as required by lender.

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