Once you select a lender and a mortgage suitable to your needs and abilities, it's time to officially apply for that mortgage. Submitting an application for a mortgage can seem intimidating at first, but it need not be difficult.
Before sitting down to fill out a mortgage application, be sure you have the following information handy:
* your income, past and present;
* a list of your assets;
* a tally of your regular expenses and existing financial obligations;
* an accounting of your employment history
Mortgage applicants will also need to provide the following records or documents:
* the past two year's W-2s;
* pay stubs for the month leading up to submitting the application;
* statements from all the applicant's bank accounts - checking, savings, retirement, investments, etc.
* proof of current outstanding debts that show both the current balance and minimum monthly payment on each (ie. credit cards, car loans, student loans, other home mortgages, child support, alimony, etc.)
If you are self-employed or you own a share or more in a business, you will also be asked to provide copies of your federal income tax returns.
The preceding is not the only information a lender may require of you, but it is a partial listing of the information that any and all lenders will most assuredly require.
After you've submitted your application, the lender will order a property appraisal (paid for by you), and will have your credit checked. Oftentimes, a potential borrower might choose to have the property appraised independently before submitting an application, just to make sure that the property value merits the offer made. Potential borrowers may also check their own credit first before applying for a mortgage so that they may take the initiative to fix or correct any negative items remaining on their credit report before the potential lender takes a look at it. The 3 major credit reporting agencies - Experian, Equifax, and TransUnion - now allow all consumers to receive a free copy of each of their credit reports once per year.
Lastly, prior to applying for a mortgage, consider hiring a licensed inspector to examine the property for defects and potential problems. Whether or not a home inspection is contractually required by the lender or the homeowner's insurance it is nonetheless advisable that any person considering buying a home protect themselves from costly headaches and heartaches later on by ordering an inspection regardless. Any halfway-responsible offer to buy will include a contingency that relieves the would-be buyer of an obligation to purchase should the inspection reveal any information about the home previously unknown to the buyer that the seller is unwilling to pay to take care of prior to closing.
Once a mortgage application is submitted, it can take several weeks to several months to be approved or denied. Once a mortgage application is approved, the next step is to schedule and prepare for closing. If, however, an application is denied by one lender, it doesn't mean another lender might not approve a buyer's application. In these cases, it helps to know why the first lender denied the application so that the buyer may try to remedy the problem before submitting a subsequent mortgage application elsewhere.
