Are you feeling overwhelmed at the prospect of applying for a mortgage? Have no idea how, to begin with the loan application process? Don’t worry, anyone who’s bought a home has been there. We understand that it can feel like information overload, but we’re here to make it easier for you! ADPI has your back every step of the way, so let us help you get started and into your first home!
In this article, we’ll walk you through how to apply for a mortgage. The preparation behind applying for a mortgage is the actual work you will need to do to obtain a mortgage. Unfortunately, gathering all the necessary information may take about a week, but once you have it all together, the actual mortgage application process becomes much easier.
Steps to Getting Organized & Mortgage Ready
1. Obtain a credit report and confirm that it is error-free
It’s relatively simple to get a credit report. Fortunately, you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies. Order online through the verified website annualcreditreport.com.
2. Know what kind of mortgage you want
Most of the information on our site references VA loans–however, there are other options and things to think about. A guide to the various types of mortgages can be found here.
3. Research and compare lenders
Don’t skip this step! Note that not all lenders are created equal. Meaning that not all lenders will give you the same interest rate or closing costs. Make sure you research a variety of lenders to ensure you are getting the best deal possible.
4. Gather necessary documents
Here’s where you’re going to spend a bit of time. This list isn’t exhaustive, but should give you a good start:
- Two previous years’ tax returns
- Two previous years’ W-2s and/or 1099s
- 1099Rs, if applicable for retirement income
- Award letters
- Pension statements
- Most recent 30 days’ pay stub or LES
- Most recent 60 days’ bank statements
- Retirement or investment account statements (401k, annuity, etc.)
- Copy/scan of IDs
- Debt obligations
- Down payment gift letters, if applicable
5. Get pre-approved to borrow at a given loan amount
This begins the loan application process with your chosen lender. Usually, the application process begins online, but if you need help, don’t be afraid to call the lender.
6. Choose your home and apply for the loan
Once you’ve applied for the loan, the rest of the process takes about 45-60 days. After the contract is submitted, the flow of the paperwork is mostly out of your hands, and your job is to wait patiently. We know–easier said than done.
We hope this helped ease your mortgage fears! If you have more questions regarding mortgages, please let us know! Find us at our website or visit our Facebook group to tap into a wealth of knowledge from seasoned investors, as well as real estate newbies. Don’t be afraid to reach out for help! Happy home buying!
