WHEN AND WHERE TO APPLY FOR A LOAN?

Banks, credit unions, mortgage companies, and mortgage brokers are all potential sources for home loans. You can begin by asking friends, relatives, or your real estate agents for recommendations on who you could use for a loan. Starting this process BEFORE you start looking for a home can tell you exactly how much money you can afford to spend, which is helpful in narrowing down your search. This can also give you more bargaining power when you’re negotiating with a seller! Ask plenty of questions before choosing the right lender.

WHAT IS HAZARD (OR FIRE) INSURANCE?

This type of insurance may be required for your home. Hazard insurance covers you and  your home. Ask your lender or your real estate agent to explain whether or not your home will require hazard insurance, and if you’re buying a condo, ask if a master policy is included with your unit. 

CONTACT YOUR INSURANCE AGENT EARLY

Obtain insurance as soon as your loan is approved! Then, give your closing agent or your attorney the insurance agent’s name and their phone number. As your insurance agent about additional coverage in a homeowners policy; you’ll also want to insure personal belongings and protect against liability to things like potential injuries to visitors. 

WHAT HAPPENS AFTER LOAN APPROVAL?

After you have your loan approved and just before you close on your home, your attorney or closing agent will prepare an estimated HUD-1 Settlement Statement. This statement says what funds go where, and you’ll also find how much money you should bring to the closing appointment. It’s possible that the amount will be different than previously estimated due to things like prepaid interest, prorated fees, courier fees, and impound accounts.

WHAT YOU MAY NEED FOR THE LOAN APPLICATION

Be prepared to provide some or all of these items to your loan officer.

  • Addresses of residences for the last two or more years

  • Social Security Number

  • Driver's License or other valid ID

  • Names and addresses of employers for the last two or more years

  • Two or more recent pay stubs showing year-to-date earnings

  • Federal tax returns for the last two or more years

  • W-2s for the last two or more years

  • Checking and savings account statements for last two or more months

  • Debt: names, addresses, account numbers, and payment amounts on all loans and credit cards

  • For a VA loan, Certificate of Eligibility or DD-214s

  • Divorce decree if applicable

  • Letters of explanation regarding credit inquires or special circumstances

  • Funds to pay for credit report and appraisal