NEW HOME PURCHASE-IMPORTANT FACT IN OBTAINING A MORTGAGE
The Right Information is Key to Making a Good Decision.
Once your offer has been accepted and the Purchase and Sale Agreement is signed, you will need to apply and be approved for a mortgage. There are numerous finance options, so gathering the right information is key to making a good decision.
WHERE TO APPLY
Be a smart shopper and do your research. After you get pre-qualified or pre-approved, shopping around for better rates and terms could save you a significant amount of money in the long run. Choose a lender that you trust and a loan that will be compatible with your budget for many years. Consider exploring options from:
- Mortgage companies
- Savings and loan institutions
- Federal credit unions
- Other financial institutions
THE LOAN TERMS
Because each lender will have different terms to its mortgage, compare some of the following key points to understand which deal is the best for you.
- Interest rate
- Whether the rate is fixed or adjustable
- Whether the rate can be locked in when you apply for the mortgage; for how long and at what cost?
- Other fees charged by the lender. Do all lenders charge these fees?
- Closing costs
ARE THERE ANY ADDITIONAL FEES?
Generally, when you apply for a mortgage, you will be charged a non-refundable application fee to cover the costs of the home appraisal, credit report and the lender’s underwriting costs. The application process may take anywhere from one to six weeks depending on the availability of your underwriting documents.
Within three business days of submitting your loan application, your lender is required by law to provide you with a good faith estimate of the closing costs you will pay. Once the lender has issued a loan commitment, a closing date can be set.
WHAT DO I NEED TO BRING WITH ME DURING THE APPLICATION PROCESS?
To expedite the processing of a mortgage application, borrowers should provide the following:
1) Accepted Offer to Purchase Real Estate and a Purchase and Sale Agreement, both signed by all parties. Copies of canceled checks (front and back) used for the down payment listed on the Purchase and Sale Agreement.
2) Names and addresses of all employers for the previous two years.
3) Last two Federal tax returns.
4) Annual Gross Salary (overtime and bonuses listed separately), copies of W-2 forms from previous two years, and most recent pay stubs (at least one month).
5) If self-employed, copies of your federal income tax returns with all schedules for the previous two years. If employed by your own corporation or partnership, copies of its returns for the previous two years, and a year to-date profit and loss statement prepared by your accountant (sole proprietorships included).
6) If relying on Social Security, disability or pension income, bring a copy of the three most recent stubs or three bank statements if directly deposited, as well as the Award Certificate from the issuing agent.
7) Copy of front and back of Resident
8) Names and addresses of banks, credit unions, and depositors in which you have deposit accounts. List account numbers and balances in each account. Include copies of the last three-monthly statements for each account.
9) List of all stocks, bonds, certificates of deposit and other securities, showing current market value. Include copies of last three monthly and/or quarterly statements, account numbers, etc.
10) A complete list of your debts, such as credit cards, student loans, car loans, and child support payments as well as account numbers, minimum monthly payments and balances.
11) Verification of monthly rental payment. Copies of canceled checks (front and back) from previous 12 months.
12) If receiving or obligated to pay alimony, child support and/or separate maintenance, provide a copy of your divorce decree and/ or court order. Include canceled checks from previous 12 months to verify the receipt or payment of these funds.
HOW LONG WILL IT TAKE AFTER I HAVE APPLIED FOR A MORTGAGE?
Your mortgage lender will begin the work of verifying the information you have provided them. This process can take from one to several weeks, depending on a variety of factors.
Within three days of your application, your lender will provide you an estimate of your closing costs. You will also get a statement about your estimated monthly payment, the cost of your finance charges and other facts about your mortgage.