What a Mortgage Company typically asks for.
- W-2 forms — or business tax return forms if you’re self-employed — for the last two or three years for every person signing the loan.
- Copies of at least one pay stub for each person signing the loan.
- Account numbers of all your credit cards and the amounts for any outstanding balances.
- Copies of two to four months of bank or credit union statements for both checking and savings accounts.
- Lender, loan number, and amount owed on other installment loans, such as student loans and
- Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.
- Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
- Copies of your most recent 401(k) or other retirement account statement.
- Documentation to verify additional income, such as child support or a pension.
- Copies of personal tax forms for the last two to three years.
If you have all this information with you the 1st time you go and see the lender it will really help you get a great start on getting prequalified for your loan. Work with someone who truly knows their business and is a good lender to work with. Ask JoAnn if you have questions.
Questions to Ask Your Lender
What are the most popular mortgages you offer? Why are they so popular?
Which type of mortgage plan do you think would be best for me? Why?
Are your rates, terms, fees, and closing costs negotiable?
Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20 percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of equity by paying down the loan.)
Who will service the loan — your bank or another company?
What escrow requirements do you have?
How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if it drops during this period?
How long will the loan approval process take?
How long will it take to close the loan?
Are there any charges or penalties for prepaying the loan?
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
- Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.
- Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised.
- Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced.
- Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration (www.fha.gov) or the Department of Veterans Affairs (www.va.gov) and offer special terms, including lower down payments or reduced interest rates to qualified buyers.
Be aware that slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment.