How to Apply for a Mortgage

Deciding to buy a home is so exciting! Congratulations on taking the first step. Now take a deep breath and get ready to jump into applying for a home loan. The process can feel overwhelming, but with some preparation, you’ll keep any problems from slowing down the mortgage process. Let’s dive into how to successfully apply for a home loan.

What documents do I need to get a mortgage?

For every mortgage application you complete, the lender will require various documents to verify your income and assets. Before you sit down to fill out the loan application, gather up the following documents:

Proof of income:

You’ll be asked to supply multiple documents to prove your income to the lender. Some documents you’ll need are:

  • Paystubs for the past 2-3 months
  • W-2 forms for up to 2 years
  • Proof of other income like 1099s, child support or alimony documents, or a profit-and-loss statement

Proof of assets and liability: 

Your lender may ask for the following documents to verify your assets or liabilities:

  • Recent bank statements
  • Tax returns for up to 2 years
  • Statements on retirement or investment accounts
  • Information on long-term debts like car loans or student loans

*Keep in mind, every lender is different in what they’ll require and how far back they want the documentation.

How do I get a home loan?

Before you fill out a mortgage application, you’ll want to research various lenders, seek preapproval, and find a home you want to purchase. Once you’ve made an offer on a house, it’ll be time to select the lender you choose to work with. Make sure you have the address and description of the property and a sales contract because your lender will need to see these. 

Narrow your choices down to at least 3 lenders you’d like to borrow from. When you’ve made that decision, here are the steps you’ll take to apply for a home loan:

  1. Fill out an application: Gather up your documents, sit down, and begin completing the loan application. This can take some time, so plan for at least an hour per application.
  2. Review loan estimates: Look at and compare the lenders’ costs, terms, and APRs to understand which lender is best for your home purchase. (Want to know more about APRs? Check out this blog to understand how the prime rate impacts your mortgage’s APR.)
  3. Choose a lender: Once you’ve decided which lender to use, they’ll order a credit report on your credit history. 
  4. Loan processing begins: This can take anywhere from 1 to 6 weeks. During this time, the lender will request a professional appraisal of the property and send your application to underwriting, which verifies your income, assets, debt, and property details in order to issue final approval for your loan. The lender may request more information from you. Make sure to respond quickly to not hold up your mortgage application.

So long as the loan processing and underwriting go well, the lender will approve your loan. Hooray! Next, you’ll move on to filling out the closing documents and getting ready to move into your new home.

If you have questions, let us know so we can help you on your home buying journey!

 Your Team at Liberty Title Company of America

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