Once you’ve reviewed the variety of lending options, and what factors will go into your mortgage payment, it is time to apply for the mortgage.
Before heading in to apply for your mortgage, make sure you are aware of the paperwork that most lenders are going to require you provide for
Tax Returns and W2
Name and address of employer
Social security card or number
List of all current creditors (credit cards, student loans, child support, car loan, etc.)
Home sales contract if you already have the home picked out
Government issued ID card
Lenders may require more or less documentation than this, but as a guideline, be prepared to present all the above.
Next, there are questions which are most commonly asked by lenders, and briefing yourself on your responses could help ease the process. These questions will fall mostly into the following categories:
Employment and Income
Assets and Cash Reserves
Down Payment Amount
Purpose of Loan
The following themes in responses will help ease the lender’s concerns, and work in your favor:
Steady income and long term employment
Low debt with no major recent purchases
Property is to be used as primary residence (as opposed to investment or vacation)
Larger down payment
In response to the lender’s questions, it is important that you ask questions of your own. These questions will allow you to compare potential lenders and decide which the best for your particular situation is:
What will the interest rate on the mortgage be? Will this change? If so, when/how much?
What origination fees will be charged?
What are my options to pay points in return for rate reduction?
What are the total closing costs?
Is there a prepayment penalty? If so, before what point, and what is the penalty?
What is the required down payment? If I present a higher down payment, will that reduce my interest rate?
Do I qualify for this loan?
What additional documents are needed?
How long will the approval process take?
What are possible reasons for delay in an approval decision?
After these discussions with each potential lender, it is time to apply for the mortgage by filling out the appropriate paperwork. Be confident in your decision after choosing the correct type of mortgage, the correct type of lender, and the combination of the two which will allow you to move into your dream home.