Mortgage Information

Important Questions to Ask Yourself

One of the first and most important steps you can take is to ask yourself a few important questions:

• How long do you plan to stay in this house?

• Will you be using it as a primary residence, second home or investment?

• Do you plan on any changes in the next few years (expanding your family, kids moving to college, retiring, moving for business, etc.)?

• Can you foresee income changes from promotions, relocations, retirement, etc.?

• Would you rather reserve your assets by raising the loan amount to reduce your cash to close, asking the seller to pay closing costs on your behalf?

• What's more important to you: the lowest interest rate or the lowest monthly payment?

These questions are important because different loan programs benefit people differently, depending on their stages of life. When all is said and done, figure out how long the loan will be around and how much it will cost you during that time. This plan covers the big picture for meeting personal financial goals. Plus, it allows for future tweaks over time to help meet those goals.

Shopping for the Right Lender

If you're willing to shop for the best rate and terms, it could be as beneficial as all your careful negotiating for the best price and terms on the house! It's okay to let them know you'll be checking around with others.

Here are some good questions to ask all you'd care to research or interview. You can call them, or email and send the same questions to each. Sometimes buyers have simplified the loan shopping process by taking one quote and sending it to all, seeing who can beat it overall.

• I am looking for a ___% down... or ____ type of loan - do you have that?

• What is your current rate for a ____ year fixed rate loan (or variable / ARM)?

• What are your total closing costs, and any other fees or costs associated with the loan?

• How much should I ask the seller to pay in closing costs / pre-paids for this trype of loan with you?

• How long does it typically take from the time of application with you to get a pre-approval? Fully approved loan?

• How much should I ask the seller to pay in closing costs / pre-paids for this trype of loan with you?

• Do you require title insurance for the lender?

• Do you require me to have an account with your bank? Do auto-withdrawal?

• Do you require escrows for taxes and insurance?

• Does your bank retain the servicing of the loan, so my payment is always made to you?

• Anything incredible you want to do for me that makes my decision really easy?!

• If I'm interested in continuing the discussion with you, can you summarize this in a quick email or worksheet and send it over to me today?

Mortgage Document Checklist

As part of the mortgage process, there are certain items you will need to provide to support your mortgage application. Here are a list of the most common items you could be asked for, depending on your financial situation. Preparation in advance can save you a lot of time and hassle by having all of your documents ready when speaking or meeting with a loan officer.

If Purchasing a New Home (Not a refinance)

Offer to purchase

• Purchase and Sales agreement

• Earnest Money deposit (down payment checks): copy of cancelled checks used as deposit/down payment

• Homeowners Insurance: a binder and paid receipt for one year will need to be obtained, prior to closing

Income

• Current pay stub showing 30 day history

• Last 2 years W-2 forms or Last 2 years 1099 forms

• Last 2 years federal tax returns (needed if using bonus, comission, self-employed, trsut, rental income)

• Copy of Social Security Award letter or Disability award letter (if applicable)

• Copy of pension/retirement check or evidence of direct deposit (if applicable)

• For interest and dividend income, copy of last 2 years tax returns and provide assets that generates the income

• If gap in employment within the last 2 years, letter of explanation

• If self-employed, copy of current Profit and Loss, 2 years' personal federal tax returns (include k-1's) and corporate, s-corporation or partnership returns

• If rental income, copy of current lease(s) and 2 years personal federal tax returns

• If divorced and receive alimony and child support, copy of divorce decree. If recently divorced, must have received for at least 6 months and copy of cancelled checks will be needed

Assets

• Most recent 2 months bank statement, all pages for all asset accounts

• Documentation of any large deposits into the asset accounts

• If gift funds received and used, copy of completed gift letter and receipt of gift

20 Commandments When Applying For a Mortgage

1. Thou shalt not change jobs or become self-employed

2. Thou shall not buy a car, truck, van or boat... unless you plan to live in it!

3. Thou shall not max out your credit cards or let your payments fall behind.

4. Thou shall not use your credit cards for an advance on your down payment or closing costs.

5. Thou shall not spend the money you have saved for a down payment or closing costs.

6. Thou shall not keep your down payment money in your freezer, under your mattress or buried in a tin can in your back yard.

7. Thou shall not buy furniture for a house you do not own yet.

8. Thou shall not originate new inquiries on your credit report.

9. Thou shall not make any large deposits into your bank account.

10. Thou shall not change bank accounts.

11. Thou shall not send 5 pages of your bank account statement when the statement says 6 pages.

12. Thou shall not have NSF fees on your bank statements.

13. Thou shall not cross out account numbers on your bank account statements or your social security numbers on your tax returns, W-2's or paycheck stubs.

14. Thou shall not take 3 weeks to submit additional documentation requested by the underwriter.

15. Thou shall not co-sign for anyone immediately before, after or during the application process.

16. Thou shall not be your own home inspector (unless you are one in real life).

17. Thou shall not send pictures of your pay stub from your iPhone.

18. Thou shall not expect the home to appraise higher than every other house in the neighborhood.

19. Thou shall not complain about the interest rates being lower on TV if your credit score is below 740.

20. Thou shall not purchase anything (other than food, gas and basic toiletries) until after the closing!