When buying a home, the loan application is stressful for many people, but it doesn’t have to be. I have close professional relationships with many lenders and they’ve helped me recognize some things that make the loan application process uncomplicated:
1 – Assemble a list of questions about your loan program
Make sure to bring a list of questions with you if you don’t completely understand the advantages and disadvantages of the different programs. At times, it can be hard to know the characteristics of fixed and adjustable rate mortgages. One of my lenders or I will help you understand the advantages and disadvantages of both.
2 – Determine when to lock
By locking in an interest rate, the lender is keeping to the mortgage interest rates for the loan – typically at the time the loan application is received. By floating the rate, you can lock the rate anytime between application and closing. Those who choose to float presume that the interest rates will dip in the near future.
3 – Decide if you want to pay additional points to lower your rate
Normally you can choose to pay additional points to lower the interest rate of your loan. Every point is 1 percent of the loan and is payable in cash at closing.
4 – Compile your paperwork
Obtaining a loan requires a lot of paperwork, so you should take some time to get all your documentation together. Here is a quick checklist:
2 paycheck stubs
- Covering most recent 30 day period
- 2 paycheck stubs if paid bi-weekly, 4 paycheck stubs if paid weekly, etc…
2 months asset statements (including pages intentionally left blank)
- Checking accounts-all pages
- Savings / Investment accounts-all pages
- Most recent quarterly statements on:
- Investment accounts
- Retirement accounts
2 years tax documents (as applicable to your employment)
- Most recent two years W-2’s
- Most recent two years personal tax returns (including all schedules)
- Most recent two years 1099’s
- Most recent two years K-1’s
- Most recent two years business tax returns (including all schedules)
Conforming loan amounts are loans under $510,400. The high balance conforming loan amounts are loans $510,400 – $765,600. Jumbo loans are anything over that loan amount. There are many different type of loan options to fit any situation including loans with as little as: no money down, 3.5% and 5% down.