There’s A Right Way, And A Wrong Way
In today’s competitive housing market, it’s critical that you understand how to apply for a home loan without errors. Some home loan mistakes cannot be undone, because mortgage underwriters cannot “unsee” what you put down on your application, even if you fix your slip-up.
For instance, if your bank documents show bounced checks, you’ll want to clean that up for a couple of months so you can submit pristine statements.
How To Apply For A Home Loan
The Uniform Residential Loan Application, also known as the Fannie Mae Form 1003, is what lenders use when determining a homeowner’s ability to get approved for a mortgage loan.
If you’ve never seen this form before, it can seem a bit intimidating at first. No need to worry, however. Your lender can help guide you through this form.
The way you apply for a mortgage may vary depending on the loan officer, and the lending institution.
Some lenders will take down all your information in person, or over the phone. Alternatively, thanks largely to today’s technology, many lenders will send you a link that will take you to a website containing their online application.
The information from your loan application can then be imported by your lender, populating the appropriate fields that are necessary to complete your loan application.
Regardless of how you do it, the first step to buying or refinancing a home is to fill out a mortgage application.
The information you provide on the mortgage application, will give you an idea of the paperwork that will ultimately be needed by your lender. Be prepared to provide the necessary documentation to support the information you’ve given on the loan application.
Preparing For Your Loan Application
When determining your qualifications for a mortgage, lenders look at your ability to repay the home loan.
They focus on three major factors.
Credit
Your credit scores and your pay history are vital components. There are three primary credit bureaus, and all produce different scores. Because credit is such a major factor when obtaining a mortgage, it is a great idea to check your credit prior to applying.
Before applying, make sure your credit scores meet or exceed minimums set by the lender. Many establish higher levels than those set by the programs themselves. For instance, FHA requires minimum FICOs of just 580 for 96.5 percent financing, but many lenders set their minimums at 620 or higher.
