Depending on your unique financial circumstances, here are seven mortgage documents that you may need to submit with your application for a home loan. If you are unsure about how to apply for a home loan, knowing the following guidelines can help you understand more about how lenders will evaluate your application. While many lenders are offering online options that streamline the mortgage application process, following these six steps for applying for a home loan can save you time and potentially delays during the lending process.
Knowing your loan options before you begin looking for homes can aid in your home search, providing an idea of how much money lenders will lend to buy you a house. Once you have decided on the mortgage type, compare shop for a loan online and/or get quotes from multiple lenders. Make sure that all your mortgage quotes include the same type and terms of loan, so that you know that you are comparing rates on an even playing field. Or, use a rate comparison tool to get lenders in touch with you before filling out your mortgage loan application.
You want to give the strongest application to the mortgage lender to broaden the range of your loan options and reduce interest rates. Getting preapproved by a mortgage lender means that the lender believes that you are a good loan applicant.
You have already researched lenders and received one or more pre-approvals on your prospective mortgage. You will be able to view your credit report, view loan estimates, and receive your preapproval letter right there, in-person, at the mortgage application.
Every lender is required to give you a Loan Estimate (LE) within three business days after receiving your mortgage application. By law, the lender has three business days after receiving your application to give you the loan estimate form, which is a detailed disclosure that shows you the amount, type, interest rate, and all the costs of your mortgage, including insurance for your loan, mortgage insurance, closing costs, and property taxes. If you do not tell the lender within 10 business days that you want to move forward, the lender can either amend the Loan Estimate or close your application as incomplete, and you may need to start anew.
During the closing mortgage process, your lender may review information in your mortgage application and request updated documents such as paychecks and bank statements. Lenders such as Freedom Mortgage also generally require that you back up information in your form with copies of your financial records. You and any co-borrowers in the loan will each need to sign a mortgage application confirming that the information on the form is truthful and accurate as far as you can tell.
You also will have to check the box indicating if you want your co-borrowers income or assets, if any, to be used by the lender in setting up loan details. You probably will have to sign Form 4506-T, which allows the lender to request a copy of your tax returns from the IRS.
You will pick a lender, begin an application (usually online), and submit supporting documents such as tax returns and bank statements to prove your financial situation. As you complete the application for the loan, you will likely be asked for more documentation showing your sources of money for a down payment, a cash reserve for covering your first months mortgage payments, and documents that are unique to your situation. Throughout the mortgage application process, you demonstrate your creditworthiness to lenders by providing official statements outlining your financial condition, as well as other legitimate, certified documents. Mortgage applications generally follow the format of this Uniform Residential Loan Application, with five pages of questions regarding your finances, debts, assets, employment, loan, and real estate. This Uniform Residential Loan Application.
Most lenders will require you to fill out the Fannie Mae Uniform Residential Loan Application, otherwise known as the 1003 Mortgage Application Form, when you are looking to purchase a home on a conventional, VA, FHA, or USDA loan. Lenders also may ask you to submit paperwork related to your outstanding debt, like credit card balances, student loans, or any existing home loans. This allows lenders to analyze your current debt structure so that they can determine how much of a mortgage you are eligible to take out. When deciding on a lender and a mortgage type, you will come across information on 15-year mortgages vs. 30-year mortgages, adjustable-rate mortgages, and even mortgages that are backed by the US government, if you are eligible.
When shopping for mortgage lenders, you will want to take into account things like rates, fees, and loan products. Shopping around can make sure that you get a loan that is a good fit for your situation, and since mortgages are usually such big payments, it also helps to find a lower interest rate and save money over the long run. Choosing the right mortgage lender and loan offers requires a little bit of research and patience to make sure you are getting a great deal. If you manage to find the property that is a great fit for you and your budget, it is time to take another step toward homeownership by applying for a mortgage loan.
Buying a house, which is an important milestone in peoples lives, requires that you take care of details surrounding a mortgage loan. How long it takes for you to get approved for your mortgage loan depends on many factors.
Itas important to note that mortgage pre-approval is different than mortgage pre-qualification, which gives you just a general idea of how much money lenders might be willing to lend to you, and what terms are available, based on estimated financial information that you have provided. When youare finding a lender and a mortgage thatas a good fit for your situation, you may want to obtain a mortgage preapproval, which saves you time later on when youare ready to make a homebuying offer, because lenders will have much of the information that theyall need to go ahead with a loan. The first step when applying for a mortgage is choosing a lender, such as Freedom Mortgage, whoas going to help you select a loan thatas right for you.
You, with the lenders assistance, should specify what kind of loan you would like – FHA, VA, Conventional, or USDA/Rural Housing Service – the loan amount and term, interest rates, and a few other details about the mortgage type and terms. The lender will put down on that application the details about the loan — purchase price, estimated closing costs, estimated pre-paid items, the amount of the loan, and other loan details.