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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. Licensed Correspondent Mortgage
Banker, NJDOBI
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