STEP TEN: OBTAINING A MORTGAGE
The mortgage application process can be confusing and intimidating, especially to first-time purchasers, but today’s market offers homebuyers more options than ever before.
- Have Your Records Ready
Organizing your records ahead of time will help speed things along when you’re completing mortgage applications. Our Mortgage Documentation Checklist can help you keep track of everything you need.Mortgage Documentation Checklist
Every lender requests some level of documentation in support of a loan application, though each has its own specific list of requirements. Most will require some or all of the items on this checklist in addition to a completed application form.
- Copies of contracts
The lender will want a copy of your purchase contract specifying the price and closing date. If you are selling your current home the lender may want to see the contract on that transaction as well.
- Income verification documents
The lender will want copies of pay stubs for the previous 2-4 weeks. Additionally, they may request tax returns with accompanying W-2 and 1099 forms.
- Contact information
You may be asked to supply contact information (name, address, phone number) for your employer to allow the lender to verify your information.
- Credit card and installment loan information
The lender may want to see copies of several months’ credit card statements, as well as payment books or statements for car loans and other consumer debts.
- Bank statements
You may be asked to provide statements for bank and brokerage accounts for the past 2-3 months.
- Proof of down payment funds
Some lenders require verification that the buyer has the required funds to cover the down payment and closing costs. If any portion of the down payment is being provided by others (family members, for example), the lender will probably require a letter stating that the funds are a gift and not a loan. This is often called a gift letter.
- Special items
Some lenders may require copies of car titles and ownership documents for other major assets. If relevant, divorce or bankruptcy paperwork should be provided. Borrowers who are relying upon income from a legal settlement or similar source will need to provide documentation.
- Copies of contracts
- Speak to a Lender
When it comes time to put financing in place for your new home, speak to a lender. In addition to providing insight into what you can borrow, the lender will work with you to estimate loan payments and interest rates. (S)he can offer access to helpful online mortgage calculators as well.
- Apply for Your Loan
Carefully complete each section of the application and provide all of the documentation required by the lender along with the loan application fee. Maintain frequent communication with your loan representative – if you haven’t heard anything within a couple of weeks call and ask about the status of your application. Respond promptly to any requests for additional information.