When you apply for a mortgage, it is important to know what to do, what to expect, and what the lender will be looking for. Here, we talk about how to apply for a mortgage. It is also important to know some of the mortgage basics.

Research

Before you rush out and apply for a mortgage loan know how much you can afford per month and know what types of mortgage loans are available. Be sure to get your credit report, you do not want to learn you have surprises on there.

Compare

Check out the different types of mortgage lenders. Ask your family, friends, real estate agents, etc. for references on lenders in your area.

Check out the type of loans offered by the different lending institutions, what reputation they have, and their loan approval process.

Application

Fill out an application with the lender of your choice. You will need to provide them with information such as your employment history, your income, your expenses, your assets, and your liabilities. You will also need to provide these documents (bringing all of this information with you will speed up the process):

• Bank account numbers, the address of your bank, and account statements from the past three months
• All investment statements from the last three months
• Pay stubs, W-2 withholding forms, or other proof of employment and income verification
• Proof of payment history on revolving debt (e.g., credit card statements, canceled rent checks)
• Information on other consumer debt (e.g., car loans, student loans)
• Divorce settlement papers, if applicable

After you have filled out the application, the lending company will then submit your application for underwriting. This means that all the information you supplied will have to be verified and approved. Usually at this time, the lending company will order an appraisal of the property and perform a credit check.

If the application is approved, you will receive a letter of approval from the lending company. This letter will detail the terms and the amount of money that you have been approved for. Now you can work with the lending company and the real estate agent or seller of the home you wish to purchase to set a closing date.

If your loan application is rejected, the lending company will try to help you to fix any problems they see on your application. Do not give up! Many lending companies work with people with poor credit and low down payments. You will find your dream home, however it will take some time.