The home loan process can seem complicated and frustrating. There is a lot of paperwork involved, and sometimes it feels as if everyone but you has control over what is going on. Yet, with some research, diligence and the right loan officer, you can take back a feeling of control over the process and actively participate in the funding of one of your most important purchases.
Before you begin looking for a mortgage, become familiar with the different types of loans, rates and terminology. Read the local newspaper’s real estate section and browse online mortgage broker sites that offer information about loans. Make a list of any questions you might have about the information you find. Prepare a monthly budget and determine what mortgage payment you can comfortably afford. This will become your benchmark.
The most important step you can take in the mortgage process is to find the right lender and loan officer. It is the loan officer's job to shepherd you and your loan file smoothly through to loan approval. He should be knowledgeable, experienced, responsive and prompt, as well as willing to take the time to answer questions, explain the loan process, programs and terms. Personal recommendations from friends, colleagues, family and real estate professionals can help narrow down some choices. Make appointments with several loan officers.
Prepare for your appointments by making copies of your essential paperwork for each lender. You will need your Social Security number and driver’s license, the past two years of W-2s and one month’s pay stubs to verify income. If you are self-employed, you will need tax returns for the past two years. You will also need the past three months’ bank statements and statements for any accounts that hold your down payment money. In addition, bring a copy of any credit account or loan statements you pay on a monthly basis, and court-ordered payments such as alimony or child support. The loan officer will also pull a credit report on you.
The loan officer will take all of this information and determine what kind of loan you are pre-qualified for based on the information she has on hand. A Good Faith Estimate and Truth in Lending statement are generated detailing the terms of the loan and the closing costs. This is the document you will use to compare loan offers. They should be fairly close, so go with the best deal from the loan officer you can work with the best.
After you choose a loan officer and lender, they will submit your application to the loan processor, who will compile the file, order the appraisal and gather any additional information and verification. The loan processor may ask the loan officer for additional information from you, which you need to supply promptly. When the file is finished and the appraisal is complete, she will give the file to the underwriter, who will decide if the loan is approved. After approval, all that is left is the closing, where you will sign all the loan documents and complete the property transfer. The process usually takes around 30 days.