| The loan approval process generally
begins with an initial interview where the prospective home buyer and
the lender 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 lender
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 lender, 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
lender 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 lender, you
should have a general idea if you qualify for the size and type of loan
you want. The lender should let you know if you qualify for the loan in
30 to 60 days. If you are denied a home loan, the lender must explain
the reasons. If this happens, the lender will usually discuss any
options with you. |
