The loan approval process generally begins with an initial
interview where the prospective home buyer and the mortgage
professional meet to discuss the potential loan. You
will need to bring information to verify your income
and long-term debts.
Often people prefer to meet with the mortgage company
before house hunting to determine in advance what price
range they can realistically afford and the mortgage
amount for which they can qualify. This step is called
pre-qualification and can save you much time
and trouble by making certain you are looking in the
correct price range.
For your first meeting with the mortgage company, you
should bring:
- A purchase contract for the house (if you have one)
- Your bank account numbers and the address of your
bank branch, along with checking and savings account
statements for the previous 2-3 months
- Pay stubs, W2 withholding forms, tax returns for
two years, or other proof of employment and income
verification
- Divorce settlement papers, if applicable
- Credit card bills for the past few billing periods,
or canceled checks for rent or utility bill payments,
to show payment history and amount of revolving debt
- Information on other consumer debt such as car loans,
furniture loans, student loans and retail credit cards
- Balance sheets and tax returns, if you are self-employed
- Any gift letters, if you are using a gift from a
parent or relative or other organization to help pay
the down payment and/or closing costs.
- This letter simply states that the money is in
fact a gift and will not have to be repaid.
Having these items on hand when you
visit the mortgage company will help speed up the application
process. Usually an application fee and the appraisal
fee will have to be paid when you submit the mortgage
application. This is only done after you have successfully
negotiated on a home and have had your offer accepted
by the seller. Generally, there is no fee for pre-qualification.
After the initial meeting with the
mortgage company, you should have a general idea if
you qualify for the size and type of loan you want.
The mortgage company should let you know if you qualify
for the loan within days. If you are denied a home loan,
the mortgage company must explain the reasons. If this
happens, the mortgage company will usually discuss any
options with you.
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