Before applying for your loan.


 

  1. Make a list of any questions you have about the loan program.
    Be sure you understand the advantages and disadvantages of the various mortgage programs for which you may qualify, including the advantages and disadvantages of Fixed Rate Mortgages versus Adjustable Rate Mortgages.
  2. Decide if you want to lock-in or float the loan's interest rate.
    Locking-in the rate means that the lender commits to the mortgage interest rate for the loan - typically at the time the loan application is submitted. By floating the rate, you can lock-in the interest rate anytime between the loan application day and closing. Buyers opt to "float the loan" when they believe interest rates will drop after their loan application date and prior to closing. The risk is that rather than dropping, interest rates may rise, increasing the mortgage payment.
  3. Decide if you want to pay additional points to lower your interest rate.
    Typically you can elect to pay additional points (each point is 1 percent of the mortgage loan payable in cash at closing) to lower the interest rate of your mortgage loan.
  4. Gather your paperwork. See below.

Documentation Needed to Buy a Home

  • Current Pay Stubs.

    Your last two pay stubs will suffice. Make copies and don't hand out your originals.

  • W2s.

    This is your wage and tax statement, issued by your employer for a calendar year. It is what you attach to your tax returns. Lenders generally want the last two year's of W2s from both of you.

  • Federal Tax Returns.

    If you haven't yet filed your tax return for last year, then find the two previous year's of tax returns. Make copies. Include all schedules. Tip: Make sure the tax returns are signed by you.

  • Bank Statements.

    Some lenders want two months, while others will demand the last three months of bank statements. Make a copy from each lending institution. Include every page of each bank statement.

  • Asset Statements.

    If you own stocks, bonds, mutual funds or retirement accounts, make a copy of each statement. Lenders prefer hard copies over those printed online but will accept online statements if that's how you receive your statements. Make copies.


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Post Category: Home Buying, Mortgage & Finance, General

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