For Borrowers
This page is meant to educate borrowers.
You will find information on how to get a loan.
You will also find out ways to go about it.
Check out the material on this page.
You should find it to be educational and/or helpful.
Questions For Your Lender
What is the interest rate on this mortgage?
How many discount and/or origination points will I have to pay to get this rate & loan?
What closing costs will be charged on this loan & will you provide the "good faith estimate" of those costs up front?
When can I lock in the interest rate & what will it cost me?
Is there a prepayment penalty on this loan?
What is the minimum down payment required?
What are the qualifying guidelines for this loan?
What documents do I have to provide?
How long will it take to process my application?
What might delay the approval of my loan?
The Mortgage Process
Find a mortgage that fits your needs.
Decide how much house you can afford.
Check your credit.
Pre-qualification and pre-approval.
Gather the needed paperwork.
Find a lender.
Assess your potential home.
Prepare for closing.
Closing day!
Servicing your mortgage.
The Necessary Paperwork
Federal tax returns from the previous two years.
W-2 forms from the previous two years.
Recent paycheck stubs.
Documents showing other sources of income, which could include overtime, commissions and bonuses, second jobs, interest and dividend income, Social Security payments, VA and retirement benefits, alimony, and child support.
A complete list of your creditors, such as credit cards, student loans, car loans and child support payments, along with minimum monthly payments and balances.
Investment records including mutual fund statements, real estate and automobile titles, stock certificates and records of any other investments or assets.
Canceled checks for your rent or mortgage payments.
Common mistakes during your mortgage experience
You shouldn't take out new debts during the mortgage process, period.
Any new payment obligations may bring bad news. You may have entered into the mortgage loan process with great credit, but your credit changes with new obligations. You just might not get the loan! That new car to park in your new driveway can just wait. Play it safe!
Making a job change.
A mortgage lender may refuse to close on your mortgage because you made a material change in financial circumstances. If you must make a job change during the mortgage process, contact your mortgage professional and give them the details. A job in the same field, may not be a problem. But if you are employed and think you'll make more money being self-employed, that could be a problem. You need to show a track record.
Box up your files and move out.
Lenders may request financial information during the critical time between pre-approval and the closing. Meanwhile, you are planning to move into your dream home. moving out of your current residence and packing away your valuable paperwork. Now your lender requests copies of your bank statements and pay stubs for the last six months, or they need to see proof that you paid off a certain loan. It's a good practice to keep all of your important papers somewhere you can easily find them.
Hiding the past.
Tell your lender everything; including credit problems, bankruptcy, back child support, credit score or anything that may affect your loan. Be open and honest with everyone. You can't blame your lender when something unfavorable comes up, especially if you didn't tell your lender in the first place. Also, everyone's situation is different. You should listen to your lender. Your Uncle Charlie or a lady at the cleaners can't know and assess your situation and advise what is best for you, your lender can. There are all kinds of different modifiers that make your situation unique, points, loan rates, etc. Just be honest and open so your lender can give you the right loan.
Whose debt is that, not mine!
Bad debt can increase your loan rate. Keep paying your bills on time! Don't wait for the sale of your current home or some extra money to come your way. You have debts on your credit reports you don't even know about. Those erroneous report need to be straightened out. Get a copy of your credit report as soon as possible and apply early for a mortgage pre-approval. If needed write a few letters to dispute false collections on you credit report. Have your credit checked at the beginning of the home-buying process, before you find your home. Get your report cleared up, before you find that house, the one just right for you. If your credit report is all messed up, that house may be just right for someone else.
Not being diligent.
A home purchase is the most personal and biggest investment you can make. Be careful. Ask you lender about their rates. Check to see if they are too high. If you have an A paper credit rating you should not be paying too high of a rate. A word of warning, there are a few lenders who do abuse their clients. If they want to lend you more that you can afford, they are padding their pockets and don't have your best interest in mind. Expect a lender to do what they promise to do.
Making verbal agreements.
Things may appear different on paper when compared with an previous conversation. If a commitment is made verbally, get it on paper. People may say anything to get you to sign. Review the agreement on paper, if promises have been made, those provisions should show up on your agreement. It they don't, then don't sign. Don't be duped. Get it in writing.
Using a dual agent (helping the buyer and seller in the same deal).
Commission is most likely to be paid by the seller, who wants the highest possible price. While you the buyer are negotiation for the lowest possible price. Do you see the difference of interest? When buying a home it is best to have your own agent. You may save money with a dual agent but be cautious.
Signing documents without reading them.
Review the documents that you'll be signing when escrow closes; including a copy of all loan documents. Only in rare circumstances will you have enough time to read and get all of your questions answered during the loan closing. Plan ahead.
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