How do you apply for a mortgage?  What’s the first step?  How do you prepare?  It’s sometimes hard to pick up the phone and call someone when you have no idea what you’re doing.  We want to give you a couple of tools to help you feel ready when you call a lender.

So… how to apply for a mortgage?

First, understand your budget. Look at your income and expenditure.  Lenders look at your debt-to-How toincome ratio (or DTI) when considering your loan application.  Your DTI is basically your gross monthly income stacked against your monthly payments.  There are a couple of different ways to divide this out, but we have some quick tips to make it easy in the above link.  Our unique setup allows us to work with you, so always call us to see what we can do!

Clean up your credit.  Your credit plays a huge role in your DTI.  Lenders generally look for you to be using less than 30% of your available credit.  See some tips to improve your credit here!

Save for a down payment. Depending on the type of loan you choose when you apply for a mortgage, your down payment needs to be at least 3.5% (FHA loans) or 5% with a conventional loan.  It’s important to start saving before you call a lender – they’re going to want to know what you have to cover the down payment, and that you have savings in reserve for whatever may come up in the months following the purchase of a home.

Get a preapproval.  We always recommend a preapproval – it helps you out in a couple of key ways when you apply for a mortgage loan.  One, when you’re preapproved, you already know how much you’ll be approved for – which helps you know what homes are actually within your budget.  And to a seller, a buyer with a preapproval letter is a serious buyer, and will often be selected over other offers because of that.

We thought we’d tell you exactly what we ask for when you apply for a Preapproval:

  • Legal Name
  • Co-Borrower Legal Name (If applicable)
  • Primary Address
  • Date of Birth(s)
  • Social Security Number(s)
  • Down Payment – FHA Requires 3.5% down
  • Employer(s)
  • Position(s)
  • Length of time at employment
  • Annual Income

 

After that, you’ll have to supply some other information before we can issue an official preapproval letter.  Full list here:

  • Social Security Card/License
  • 2 Years w-2’s (2 Years Tax Returns for Self Employed Borrowers)
  • Last Month’s Pay Stubs
  • Last Month’s Bank Statement
  • For VA Loans Only – Certificate of Eligibility

 

Hopefully this helps you get your bearings on how to apply for a mortgage!  If you have any questions, feel free to give us a call – we’re a Christian Mortgage Lender with a small family team that values faith and family, and has the big-power backing we know you want in a lender.  Whether it’s for your first home or 12th – we want it to be your best mortgage experience yet!

 

Best,

Audrey

The Christian Mortgage Mom

Audrey