Get Organized
You really can't do anything until you make a few basic decisions and get all of your important files and records in order. The more complete and organized you are, the greater your chances of getting the loan you want within the time frame you need it.
01. Decisions to Make
- Type of mortgage? Based on your particular financial circumstances, your broker or lender will offer you a variety of mortgages with various repayment terms.
- Mortgage amount? This is the amount of money you want to borrow. Before actually applying for a loan, many borrowers find out how much they can afford by getting pre-qualified.
- Down payment? Most lenders expect home buyers to make a down payment of at least 5 percent of the value of the home.
- Closing date? Be sure to tell your loan officer approximately when you would like to close your loan, so that the loan process will coincide with this date.
- Lock-in interest rate? A rate lock-in (or rate lock) guarantees you a specified interest rate, provided the loan is closed by the lock expiration date. Be sure to lock in for a period that will cover the time until your expected settlement date.
- For more information, see Getting Started.
02. Loan Documentation
- Your lender or broker will need all of your financial information to determine how much you can borrow.
- More loans get delayed because of lack of acceptable documentation than for any other reason. So, if you can't find some important documents, now is the time to start ordering copies from tax preparers, financial advisors, or the IRS.
- Proper documentation includes, but is not limited to: tax returns, bank statements, mortgage notes, rental agreements, pay stubs, and credit card bills.
- For a complete list, see Documentation.
03. Employment Status
- Confirm contact information with your employer.
- Find out who is authorized to release information about your employment status.
- Be sure you provide the correct contact information to the lender to avoid any lengthy delays.
- For details about employment issues, see Debt and Income.
04. Check Your Credit
- Your lender, of course, will order a complete credit history for each borrower, but you should see it first. That way, if there are any problems or issues, you can start to clear them up before you submit your final loan application.
- You can obtain a credit report from each of the three main credit bureaus for a small fee. Regardless of how good you think your credit is, you never know for sure until you check. Often times there are errors that the consumer is not even aware of.
- For complete information, see Credit.