Applying for Your Mortgage

You should always apply for multiple loans before shopping for your house. It is important to only look at homes you know you can afford.

What is Pre-Qualification?

This is the first step to getting your loan. This meeting with your lender will tell you the price range you can afford for your loan. You will be showing your lender that you meet certain requirements and it is safe to approve you for a loan.

The lender will ask you for financial information such as:

• Credit report (if you don’t have a credit history, a lender may ask for the payment history of utility bills and rent)
• Bank statements from the past six months
• Recent paycheck stubs
• Credit card accounts with amount you pay each month
• Account numbers and loan balances
• Details of other assets such as bonds, stocks, or retirement money (like a 401k)
• Name and address of someone who can verify your employment
• Past two years of residence history
• Social security numbers for you and any co-borrowers
• W-2 withholding forms, or income tax returns for the past two years to verify your income and proof of employment
• Homeowner's association information with contact information (if you’re currently living in a condo or are part of a homeowner's association)

The Four C’s: What Lenders Want

Lenders take many things into account when deciding whether to give you a loan. But here are the most common factors.

Capacity: Lenders look at your employment history to determine if you are able to repay your debt. They will consider how long you have been at your current job, how much you earn now and what you might earn in the future.

Character: Lenders review your bill payment summary and look at any history of lawsuits or bankruptcies.

Collateral: Lenders want to make sure the value of the home you are buying is worth the risk of their investment. They want to make sure the property will increase in value over time.

Credit: Lenders review your credit history to check for any debt. They then review how you have paid off debt in the past.