The Lending Process
Consider getting pre-qualified through your lender for your home loan. Prequalification shows the seller you are serious about buying and the seller may be more willing to accept your offer over others.
Finding a lender may require some research to find the best interest rate and terms that are right for you. Your loan officer can often provide options to for you to consider.
The lender will ask for personal information to conduct a credit background check. Your lender will typically request a photocopy of your current driver’s license, social security card, residence history, your current landlord’s name, your current address, and your employment history which may include pay stubs or W2s and 1040s, or a profit and loss statement if you are self-employed. Your lender will most likely review your checking accounts, savings accounts, documentation on stocks, mutual funds, 401K and retirement accounts, student loans, bankruptcy and discharge papers and other financial account information. This allows your lender to assess the loan amount you can afford.
Remember there may be additional expenses such as utilities and homeowner association fees, which are usually in addition to the mortgage payment. Buying a home typically requires a down payment. Home maintenance will be your responsibility, too. Consider market fluctuations which can equate to an increase or decrease in the value of your home. On the upside, purchasing a home provides an opportunity to build equity and take advantage of tax breaks and deductions.