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Email Post to a Friend: First-time Home Buyers: How to Apply for a Mortgage

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Home Buying Mortgage Tips
Are you thinking about buying your first home? This is one of the biggest steps you'll ever take.

If you haven't yet found your dream home, our real estate agents can help you along the way. Before you can call that home your own, however, you'll have to pay for it. If you're like most people, that means working with a lender to take out a mortgage.

Although applying for a mortgage requires some effort, it's really not that difficult. These seven steps will help keep you organized and increase your chances of a fast approval.

  1. Do Your Research
    Taking out a mortgage is a huge commitment, so you'll want to do your research before you make any moves. Begin by checking your credit score and reviewing your credit report to make sure it's accurate. If you notice any problems, you'll want to start working on fixing those right away.

    Decide what type of mortgage you want to apply for and begin researching lenders. Use an online calculator or contact a few lenders for pre-qualification so you have an idea of how much you can afford to borrow.
  1. Organize Your Financial Documents
    Failure to provide your lender with requested items in a timely fashion could slow down your approval. Avoid potential problems by gathering up all of the documents you'll need before you start the loan application process. This includes:

    • Tax returns
    • Proof of income (W-2s, pay stubs, self-employment records)
    • Statements for your bank and investment accounts
    • Photo ID

    Depending on your circumstances, the lender might also ask for gift letters, rental payment history, and other financial documentation. Don't provide anything that hasn't been requested, but be prepared to produce these items quickly if the lender asks for them.
  1. Complete Your Loan Application
    Contact your lender either over the phone, online or in person to complete your loan application. This usually consists of a standard set of questions designed to determine your credit-worthiness and ability to repay the loan. As part of the application process, the lender will also pull your credit score and history.

    Completing multiple applications within a 45-day window won't affect your credit score, so you may want to apply with several lenders. This gives you the ability to compare a few offers before you make your final decision.
  1. Carefully Review Your Loan Estimates
    Your lender will use the information you provided to make an offer, which is presented in the form of a loan estimate. This document includes important information like your loan terms, interest rate, and closing costs.  If you've completed applications with more than one lender, compare each loan estimate to determine which one is offering you the best deal.
  1. Commit to a Lender
    Make your final evaluation and choose which lender you're going to work with. Although the costs outlined in your loan estimate are important, also consider the service you've received up until this point.  Remember that you'll likely be dealing with this lender for many years, so it's important that you're comfortable with all aspects of the relationship.
  1. Wait for Loan Processing and Underwriting
    During loan processing and underwriting, the lender verifies all of the statements you made on your loan application and evaluates the risk of providing you with the loan. During this time, you'll just sit tight and wait for the lender to do its research.

  2. Close the Loan and Purchase Your Home
    Once your loan has been approved, the lender will contact you and let you know that you're "cleared to close." You'll receive a final closing disclosure which should match the loan estimate you previously received. If you choose to accept the loan, you're ready to go to the closing and become the proud owner of a new home.

When you're ready to get started with your home buying adventure, don't make the mistake of doing it alone. Our professional real estate agents will answer all of your questions and guide you through every step of the process. Contact us today and let us show you just how easy home buying should be.

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