How to Get a Mortgage

After you view real estate listings online, it may be time to get down to business and see some of the homes that peak your interest in person. But before you meet with a Realtor it is best to get pre-qualified or even pre-approved for a mortgage. A mortgage by definition is the loan you will need to borrow from a mortgage lender or broker to purchase a home.

This means that unless you can afford to pay the entire price of the home purchase with cash, you are going to require a mortgage. So what do you need to do? The first step is pre-qualification or even better, pre-approval.

Mortgage Pre-qualification vs. Pre-approval

Pre-approval is a very detailed and thorough financial process completed with your bank or mortgage broker. It will provide you, as a buyer, a letter of pre-approval, which carries more weight with sellers when they are considering accepting your offer. The letter on your behalf, will state that the loan brokerage or bank has reviewed your finances and are willing to loan you a specific amount of money to buy a house, once you find one.

Benefits of Pre-approval:

• It will show you which homes you can actually afford, and prevent you from wasting time on ones that don’t fit your budget.
• It will help you make an offer more quickly and one that sellers will take seriously.
• For any bank-owned property (Real Estate Owned or REO, which are foreclosures for sale), buyers need to have pre-approved in order to make an offer.

Pre-qualification is quick and more basic to provide you and your agent with a simple ball-park figure you should be able to qualify for. Nothing about your finances is verified by the mortgage broker at this point, so if your facts are inaccurate so will the amount you are told you may qualify for. The serious buyer goes beyond this step to obtain an accurate pre-approval for a mortgage before they get to the point of making an offer.

In order to start the process you will need to do a little research or get recommendations and find your Mortgage Lender or Mortgage Broker. Look at their lending rates and do a little interview over the phone to help you decide which one seems on top of their business and will work to make everything come together smoothly and on time for your home purchase.

Applying for a Mortgage: What You Will Need

Interest rates are the lowest they have been in decades, which means in the current market, you could qualify for your dream home, whether that equates to new home construction or one of several fine homes for sale; even the first time home buyer may learn that what they currently paying in rent could be a mortgage payment that leads to equity and ownership.

Homes are affordable to qualified buyers right now, so here is a list of what you will need when you sit down with your mortgage broker.

You and any co-borrower’s work history

• W2 forms from past two years
• Pay stubs for past 3 months
• Borrowers tax returns for past two years
• If self employed: Business and personal tax returns for past two years, year-to-date profit and loss statement and balance sheet.

NOTE: Your loan officer will run a credit report and score rating.

Total Debt

• Names, balances, & account numbers for all: Credit cards, store lines of credit, student loans, car loans and any other debt with monthly payments including alimony payments, child support payments
• NOTE: You may need to bring a copy of your divorce decree and the court ordered amounts that you pay.

Proof of your down payment

• Bank statements from the previous two months showing account balances.

Investments and Assets

• Two months of statements of any stocks, bonds, or other investment accounts
• Retirement account statements (401K and IRA)

Residence History for Previous Two Years

• If you rent, the name and phone number of your landlord.
• Proof of current mortgage or documentation of payments and status.