Mortgage Approval

Mortgage Approval

 

Getting Approved for a Mortgage

 

Having your financial house in order is vital in fulfilling the dream of home-ownership.  Getting a pre-approval letter for the mortgage before making an offer on a home will enhance your chances of negotiating the offer, especially in a hot real estate market.  Even more importantly, it allows you to be sure that you will be comfortable with the required mortgage payments and wisely set an upper limit on the home sale price.

Organize your Files

Be prepared when you meet with the lender or broker.   Order a copy of your credit report if you have concerns about your credit.  That way you can clear up any problems before you submit your loan application.  You may want to cancel credit cards that you never use…in writing. 

Organize your recent tax returns and financial documents.  This will help the lender determine how much you can borrow and estimate what you will have for a down payment.

Get contact information form your human resources department about who is authorized to release information about your employment status.  Supplying this contact name and phone number will avoid lengthy loan-processing delays.

We have a list of documents to bring with you to the initial mortgage session.

Shop for a Loan

The type of mortgage you choose will directly affect now much house you can afford and the amount of your monthly payments.  Since you will be asked to specify the type of financing you will be applying for in your offer to purchase, it is wise to explore your many options in loans.

Consider using a mortgage broker to find the best loan type and rate to fit your needs.  They have access to hundreds of loans and are experienced at looking at your specific needs and recommending the best types of loans to meet them.  Ask them to figure the total outlay for various scenarios of loans.

Don’t focus solely on the interest rates.  Getting a low rate is important, but you won’t benefit from it if you have to pay too many up-front points and other fees.

Understand the relationship between points and rates.  A point is prepaid interest and each point equals one percent of your loan amount.  The more points you pay, the lower rate you will get from the lender.  The longer you plan to stay in a house, the more you will benefit from paying points.

Think about how long you’ll keep the loan.  If you are going to move in a few years, consider an adjustable rate mortgage since you will be able to sell the house before the rate gets too high.  If you plan to stay longer, a fixed rate mortgage may be a more attractive option because your rate stays fixed for the term of the loan.

Apply for the loan

Your lender will combine the information on your application, the results of your credit report, the information about the property you want to buy, and your proposed down payment to estimate your ability to pay the money back.

Attached is the Universal Residential Loan Application form used to start the loan process.  If you have filled it out before meeting with your loan officer, you will be fully prepared for the meeting.  Be sure to respond immediately to the lenders request for additional information…you are working with time deadlines.

 

Contact Information

Photo of The Cincinnati Team - Saralou & Mary Real Estate
The Cincinnati Team - Saralou & Mary
RE/MAX Preferred Group
3522 Erie Avenue
Cincinnati OH 45208
Saralou: 513-646-4819/Mary: 513-310-4448
Fax: 513-842-7892

Last modified: 3/15/10