A lender’s conditional agreement to lend a specific amount on specific terms, to a homebuyer.
Once you have found a home (and the seller has accepted your offer) or Glossary Term: refinancing solution that fits your personal preferences, your needs and your Glossary Term: budget, it’s time to apply for your loan.If you have already selected your Glossary Term: lender, get in touch with them and they can take your application. You can apply for a Glossary Term: mortgage by filling out an application in person, and depending on your lender, may be able to start over the phone, or online. You’ll fill out an application, providing information on behalf of yourself and anyone else who is going to be listed as a Glossary Term: co-borrower on the mortgage (like a spouse or partner). If you’ve already been Glossary Term: preapproved, you may have filled out some of the application details by this point.
To apply for a home mortgage or to refinance, 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:
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 Glossary Term: credit report as part of the process.
Because a mortgage is such an important financial commitment, 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.
A rate lock, also known as a “rate commitment,” is your lender’s assurance that the interest rate and Glossary Term: 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.