Application Process

For many home buyers, selecting and applying for a mortgage is a new experience with a lot of unknown factors. But it doesn't have to be if you know what to expect and what your mortgage lender is expecting from you.

The first step is the most important

If you start the process with a quality lender and a good loan officer, you are off to a good start. If you have the right product at the best rate, you are off to a great start. Discuss all your options with someone who is qualified to evaluate your financial situation and match your needs with the best available type of mortgage.

It may seem they need to know everything about you, but actually all your mortgage lender needs to know about you is your employment, finances, and information about the home you're buying. However, you will need to provide quite a few details about these topics, and your application process will go much more smoothly if you're prepared.

What happens after I apply?

Your lender will begin the work of verifying all the information you've provided. This process can take anywhere from one to six weeks, depending on the type of mortgage your choose. Within three business days after your application, the lender must give you an estimate of your closing costs. The closing is the actual settlement of your loan.

You'll also get a statement that shows your estimated monthly payment, the cost of your finance charges, and other facts about your mortgage. Stay in touch with your mortgage lender, be prepared to answer any questions that might come up and remember that mortgage lenders are in the business of making loans, not denying them.

Speeding up the Mortgage Process

Be sure to respond promptly to your lender's requests for information while processing is taking place.

Be prepared to provide the following typical items:

• The final purchase contract for the house (if applicable).
• Pay stubs for each applicant, showing earnings for the last 30 days and year-to-date earnings. (These must be computer-generated or typed originals that identify the employer and the employee's name.)
• Award letters for Social Security or pension income.
• Last two year's W2's and 1099's for each applicant. If you're self-employed, the lender may require your personal and business tax returns for the previous two years and your company's year-to-date Profit and Loss statement.
• The last two months' financial statements.
• Homeowners insurance information
• Copy of divorce decree showing obligations and/or income.
• Account numbers for all bank accounts, along with account statements for the past two months.
• Information about liabilities, including loan and credit card account numbers and the names of your creditors, addresses and phone numbers .
• Evidence of your mortgage or rental payments, such as canceled checks.
• An irrevocable gift letter if you are receiving a monetary gift from a relative.

If self-employed, you will also need:

• Year to date profit and loss statement.
• Copy of last two years' federal tax returns with original signatures.
• K-1s for all partnerships.
• Copy of last two years' partnership returns for general partners.
• Copy of last two years' 1120 return for corporations.

If you have been declared bankrupt in the last 7 years, you will need:

• Bankruptcy Petition/Decree, Schedule of Creditors and copy of Discharge.
• Letter of explanation in regard to the bankruptcy.