How to apply for a mortgage
Once you have found a home (and the seller has accepted your offer) that fits your personal preferences, your needs and your budget, it’s time to apply for your loan.Select your lender and start your application in person, and depending on your lender, over the phone, or online. You’ll provide information about yourself and anyone else who is going to be listed as a co-borrower on the mortgage (like a spouse or partner).
What you’ll need
To apply for a home mortgage, you’ll need to provide your lender with documentation to help verify your employment history, creditworthiness, and overall financial situation. If you are applying with someone else (called a co-borrower, such as your spouse), they will also need to provide the same documents. Be prepared to provide the following:
- W-2s (for the last 2 years)
- Recent pay stubs (two most recent consecutive)
- Bank statements for all financial accounts, including investments (for the last 2 months, all pages)
- Signed personal and business tax returns (all pages and relevant schedules)
- If self-employed, a copy of most recent quarterly or year-to-date profit/loss statement
- A copy of the signed Purchase and Sales Agreement
Your lender may require more documents, depending on your circumstances and the type of mortgage for which you’re applying. You can expect your lender to ask you details about your employment and financial history. With your permission, your lender will also run your credit report as part of the process.
Be sure to take your time and carefully fill out the application as completely and accurately as possible. Not disclosing credit problems up-front or holding back requested documents will only delay the process and potentially prevent approval of the mortgage, so it’s to your benefit to fully disclose everything about your finances.
Locking in your interest rateSince interest rates fluctuate frequently, things can change between the day you apply for your loan and the day you close. If you want to protect yourself against rising interest rates and ensure that the loan terms you used to build your budget are locked, you might consider locking in your rate with your lender when you fill out your loan application.
A rate lock, also known as a “rate commitment,” is your lender’s assurance that the interest rate and discount points are guaranteed until the rate lock expiration date. The lender will provide the terms of the rate lock to you in writing, including the agreed-upon interest rate, the length of the lock, and any discount points you choose to pay.
Of course, if you believe that interest rates will decrease in the near future, waiting to lock your rate may make sense to you. In the end, it’s a personal choice when to lock your rate. The rate must be locked prior to the lender preparing your closing documents. Talk to your lender about the choice that best suits your needs and your preferences.
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