1. Interview mortgage lenders to find the best fit. Dylan can you provide you with a list of lenders he recommends.

  2. COMPLETE THE RESIDENTIAL LOAN APPLICATION

    It requests information about your income, assets, liabilities and a description of the property.

  3. SUBMIT ALL DOCUMENTATION REQUESTED BY YOUR MORTGAGE LENDER

    The lender will need documentation pertaining to your personal finances — your earnings, your monthly expenses, and your debts — to help gauge your willingness and ability to repay the mortgage. You may be requested to provide any or all of the following information:

    • Social Security Number
    • Birth date
    • Most recent pay stub showing year-to-date earnings
    • W-2 tax forms and tax returns for the last two years
    • Names, addresses and telephone numbers of your employers for the past two years
    • For all loans and charge accounts, the name of the borrower, name and address of the institution, account number, monthly payment and current balance
    • For all deposit accounts, such as checking accounts, savings accounts, stocks, bonds, etc., the name on the account, name and address of the institution, account number and current balance
    • Three months of your most recent statements for deposit accounts, stocks, bonds, etc.
    •  

  4. PAY AN APPLICATION FEE TO COVER PROCESSING COSTS (IF THE LENDER CHARGES ONE)

    All other closing costs will be itemized in separate disclosure documents, which the lender is required to provide to you upon receipt of your application.

  5. YOUR LENDER IS REQUIRED BY LAW TO PROVIDE YOU WITH THE FOLLOWING ONCE YOU SUBMIT YOUR APPLICATION:

    • Truth-in-Lending Disclosure: This statement includes a summary of all costs associated with the loan.
    • Your Annual Percentage Rate or "APR": This is the cost of credit expressed as a yearly rate. The APR includes the interest rate, points, broker fee and certain other charges that you (the borrower) are required to pay.
    • A Good Faith Estimate (GFE) of the costs associated with the loan.
    • ARM Disclosure (if applicable): Information on the important terms and costs of an adjustable-rate mortgage, the past performance of the index to which the interest rate will be tied and a copy of the booklet, "Consumer Handbook on Adjustable-Rate Mortgages."
    • "A Home Buyer’s Guide to Settlement Costs":  A government publication that describes the closing or "settlement" process and its costs as well as information on your rights.
    • A notice concerning your right to a copy of the property appraisal, if you are being charged for that appraisal. You are entitled to a copy if you have paid the cost of the appraisal to the lender.

ONCE YOU SUBMIT YOUR APPLICATION, SEVERAL THINGS TAKE PLACE BEHIND THE SCENES:

  • APPRAISAL: The lender will order an appraisal on the property because it is the collateral for your mortgage. You are entitled to a copy if you have paid the cost of the appraisal to the lender.

  • CREDIT REPORT: Lenders will also examine your file at the credit bureau to learn if you pay your bills on time. You have a right to know what information is contained in your credit report and to have someone from the credit bureau help you understand what the report says. The major credit bureaus are:

     

     Equifax(800) 685-1111www.equifax.com 

    TransUnion(800) 888-4213www.transunion.com 

     Experian(888) 397-3742www.experian.com 

    You can order a free annual credit report online at www.annualcreditreport.com , by calling (877) 322-8228, or by completing the Annual Credit Report Request Form found at: www.annualcreditreport.com , and mailing it to:

    Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

     

  • FLOOD HAZARD DETERMINATION: The lender will determine if the property is in a flood hazard zone, and if so, you'll be required by Federal law to purchase flood hazard insurance prior to closing your loan. If you do not purchase the required insurance, the lender will not fund your loan.  You are required to maintain flood insurance for the life of your loan while your property is in a designated flood zone.

  • PEST INSPECTION: You may want to pay for a pest inspection to be fully aware of the condition of the home you are about to purchase.

  • CREDIT DECISION – UNDERWRITING: Your lender will review all of the information obtained as part of your loan application. This information can include your application, your credit history, your tax returns, the appraisal for the property, the title search for the property, your financial condition (assets, debts, income and expenses), the amount of your down payment, as well as the type and terms of the loan you are requesting.  When all of the information is considered, the lender will take one of the following actions:

    • The lender may approve your application.
    • The lender may ask for additional information.
    • The lender may decide not to lend you the money you've requested.
    • The lender may make you a counter-offer. For example, you may apply for a 30-year fixed-rate loan with a 15% down payment. The lender may offer to make you a 30-year fixed-rate loan with a 20% down payment.
    • If your application is turned down, Federal law requires the lender to tell you so in writing and to provide you with the specific reasons for the denial.  Make sure you understand the reasons given — you may be able to find answers or alternatives that will satisfy the institution's lending standards.

      For instance, you may discover that you inadvertently reported your monthly income rather than your annual income, or that your credit history includes information that is inaccurate.