We provide this section to make the process of getting your mortgage less confusing. While this information is helpful it cannot replace a good working relationship with a reputable mortgage lender. Our Realtors can direct you to lenders and loan officers who have demonstrated a track record of service and reliability. Quality can vary, depending on the type of mortgage lender, which office you are obtaining your loan from, the loan officer, the support staff, and a variety of other factors. You want someone who has proven dependable and ethical in the past.

Today, there are many types of mortgage products that may apply to your financial situation. Your lender will know their special requirements inside out. Don’t be afraid to ask questions if there is something you don’t understand. Your lender and Realtor will be happy to guide you through the loan process. Together, they can make certain you understand all the terms, conditions, costs and required documentation associated with the process.

What To Bring When Applying For A Mortgage

If you know the kind of information you’ll be asked to provide and have it all assembled you’ll find the process can go fairly quickly. Use the following checklist and bring the items that apply to you.

All Borrowers

• Application fee. This varies slightly lender to lender. This fee generally covers a credit report & appraisal fee. Check with your lender for the amount.

• Copy of the Purchase Contract signed by all Buyers and Sellers.

• Copy of the Seller Disclosures signed by all Buyers and Sellers.

• W-2’s for the last 2 years.

• Most recent pay stubs for each applicant.

• At least 2 year’s employment history (Written explanation if there are gaps in employment)

• Residence addresses past 2 years, Landlord name and address for last 12 months if you rent.

• 2 to 3 months bank statements for all savings and checking accounts. Money market accounts, CD’s or investment accounts if you have them. (Include account #’s, balances and bank name)

• Records of stocks, bonds, mutual funds and other investments. Dividends and interest received from any of these. (Form 1099’s provided for tax purposes are ideal)

• Investment statements for 401(K), IRA, or Keogh plan.

• Proof of any other income you rely upon. (i.e.: rental income, child support, etc.)

• All debt information including auto loans, bank or credit union loans, credit cards, store cards, existing mortgages or equity loans, etc. Debt also includes child support, alimony or maintenance payments you are required to make.

Retired or Disabled

• Social Security award letters, Pension information, Disability award letters, or 2 years complete Federal Tax returns.

If Paid Commission, Heavy Overtime or Bonuses

• 2 years tax returns with 1099’s, W-2’s, etc.

If Self Employed

• 2 years Federal Tax Returns, Corporate Returns, or Partnership returns, whichever is applicable.

If Divorced

• Copy of final divorce decree.

VA

• DD214 or certificate of eligibility.

Miscellaneous

• If you have graduated from college in the last 2 years, a copy of your diploma. (College or technical school can be counted as job time)

• If you are receiving a gift, provide the donor’s information. (i.e.:  name, relationship, gift amount, and bank name)

The above information is the same required by most lenders, however, each lender has their own procedures and requirements. Your lender may require additional information. It may take some time to gather all the required information, however, knowing what to bring to your meeting with your loan officer will result in fewer delays in the processing of your loan.

Good Faith Estimate

The lender is required by Federal law to provide you with an itemized estimate of the cost to close (settle) the loan. This report is referred to as a “good faith estimate”. It is a ballpark estimate of how much money you will need to pay at the closing table. Actual cost can differ from the actual amounts indicated, so take this for what it is- an estimate.

Lending Criteria

Different lenders have different guidelines when assessing mortgage applications, but they generally have three main criteria: character, capacity, and collateral.

Character

The lender will be attempting to make an assessment of your credit history with a view to predicting how you will meet your obligations in the future. Today, many lenders are using automated credit scores provided by the major credit agencies.

Capacity

The lender is concerned about your ability to meet your financial obligation and will be concerned with your income and debt load.

Collateral

Lenders want to be assured that the security that has been provided for a loan is sufficient to cover the loan in the event that it is not repaid. That is why they will have an appraiser assess the value of the property as an extra precaution.

What Happens After You’ve Applied?

For your lender the real work is just beginning. Your application, along with all the supporting information you have provided, is submitted to the lender’s processing department, and then to the underwriter.

Verification

The processing department is responsible for verifying all the information you provided.

The Underwriter

Here is where all the information is reviewed and considered, and the final decision to approve or decline your loan is made.

How Long Can You Expect To Wait For An Answer?

Processing times will vary, and can be affected by things beyond your lender’s control such as waiting for verifications to be returned. Generally though, the process will take approximately 30 days. When you make your loan application, your lender should be able to give you a fairly accurate estimate.

What Does It Mean To Be Pre-qualified?

You may be pre-qualified before you actually apply for a mortgage loan. Being pre-qualified simply gives you a ballpark idea of how much you might qualify to borrow based on your stated income, assets and liabilities. You do not actually apply for a loan and none of your information is verified. The loan amount is in no way guaranteed. With this in mind it is better to be pre-approved.

What Does It Mean To Be Pre-Approved?

A pre-approval is one step better than a pre-qualification. With pre-approval, your lender will pull your credit report and based on your credit score and stated income, “pre-approve” you for a loan amount. You still do not formally apply for a loan, but the lender will conditionally approve your loan. Full approval is dependent on verifying all of your information and several other things. However, you are a step closer in the process and this will speed things up when you find the home of your dreams.