How to Apply for a Mortgage Loan

By Susan M. Keenan

Applying for a mortgage loan is a simple process. Each applicant goes through three basic processes: researching information of available mortgages, applying for pre-qualification, and completing the final application process.

The initial step is perhaps the most anxiety inducing. This is the step where the individual looks at all of the available choices in mortgages and realizes just exactly how costly a venture buying a home truly is.

A variety of loans exist including fixed rate interest loans, adjustable rate interest loans, and interest only mortgage loans. Each consumer needs to look at the options and determine which one is the best for his or her particular situation. In addition to varying interest rates, a variety of loan terms, or the number of years the loan will be held, are available. Once the consumer has decided upon the mortgage, including the term and interest rate, it is time to begin the next step.

Select a lender, such as a bank or a mortgage broker. Make an appointment with the lender to discuss the terms you have decided upon for your mortgage. Specific information is required in order to be approved for a mortgage. The information that you provide will determine your feasibility as a borrower who is worth the financial risk.

At your initial meeting with the lender, you will be asked to provide documentation on your income and debt obligations. In particular, you should bring the following documents:

• Pay stubs for the last four weeks for each applicant on the mortgage.
• W-2 forms for the last two years for each applicant on the mortgage.
• Personal employment history for the previous two years, including pertinent information such as employer's name, address, and phone number for each applicant on the mortgage.
• Proof of any additional income on a monthly basis, such as bonuses or commissions.
• List of all monthly expenses, including but not limited to credit card debt, installment loans, college loans, or alimony and child support payments.

In addition, some individuals need to provide additional documentation. If you have any of the following, then you need to bring the paperwork to the meeting as well:

• Divorce decree
• Copies of alimony or child support checks received
• Disability letter
• Social security award letter
• Copies of pension checks
• Copies of retirement monies

In the case of individuals who are self-employed, the following information should be provided as well:

• Profit statements for the last month
• Loss statements for the last month
• Balance sheets for the last month
• Federal tax returns for the last two years

If you are applying for the loan with a co-applicant, try to arrange a meeting for both of you at the same time. Additionally, bring the proper form and amount of payment to the meeting. Being prepared for each meeting with your lender will aid the process and keep the time factor to a minimum.

After pre-approval has been given, the only thing that remains is the actual application itself. Your lender will guide you through every step. If you have any questions, you should ask them when that you think of them. Once you turn in the completed application, it is simply a matter of waiting for the final results.

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