Loans and Mortgages
APPLYING FOR A MORTGAGE
We have found the right house for you…submitted a contract for that house…and that contract has been accepted by the seller.
Congratulations!
Now, it is time to meet with your lender to get the loan application underway. The lender will meet with you, and fill-out the application form and collect the paperwork from you that they will need to get your loan application underway.
Typically, the following paperwork will be needed for loan application:
- Pay stubs for the most-recent 30 day period
- W-2 forms and/or 1099 forms for the past 2 years
- All pages of your federal tax returns for the past 2 years
- All pages of your bank statements for the past 2 months (or a 60-day printout of all activity, for all accounts)
- The name & phone # of your landlord or management company
- Your driver’s license
- Copy of your separation agreement and/or divorce decree if you are paying or receiving alimony/child support
- All pages of your bankruptcy papers, if you have filed for bankruptcy in the past 7 years
None of those items is a “must”…but…the key to a smooth loan approval is to be prompt and thorough you are with providing these papers to the lender.
At the time of loan application, the loan officer will discuss with you the option of locking-in your interest rate. Interest rates change frequently, and no-one, even an experienced loan officer can predict where interest rates will be next week or next month. Typically, you will have the option to lock-in your interest rate. This step will guarantee that your interest rate will not increase prior to closing. But, keep in mind that once you have locked-in, your interest rate is “locked” and won’t decrease either, if rates drop prior to your closing.
The loan officer will collect that paperwork and notify you of any additional papers that they may need.
Typically, you have to pay for the appraisal of your home at the time of closing. Ask your loan officer how much the appraisal will cost. The appraisal is ordered by your lender, and will tell the lender (and you and I) what that house is worth, in the appraiser’s opinion.
If the appraised value matches the sales price, or if the appraised value is higher than the sales price, we are in good shape, and the loan process keeps moving forward. If the appraised value is lower than the sales price, we need to contact the seller to request that they reduce the price to that appraised value.
Once the lender has the appraisal and all of the needed papers from you, they will send the loan to their bank for underwriting. That is the process where the bank reviews the appraisal and the rest of the paperwork, and makes a decision on whether they will approve the loan.
Often, when the bank approves the loan, they will ask for a few more additional items from you, to make sure that “all of the t’s are crossed and all of the i’s are dotted.” Getting those follow-up items to the bank will allow your loan to be ready for closing as quickly as possible.
At that point, your loan is approved…all of the follow-up items are OK’d…and you are ready to go to closing on your house!
