Mortgage

Step 2: The Mortgage Process

You will want to determine what type of lender best suites your needs. You have choices from local banks to large financial institutions. Do you feel comfortable only working with someone over the phone or would you like to sit down face to face? Do not lock yourself into one lender for your loan as you will want to shop for the best interest rates later in the home buying steps.
 
Next, you will want to get pre-approved for a mortgage. This will determine how much house you can afford. Even if the bank tells you that you can qualify for a $500,000 mortgage, be sure to consider your quality of life and not let yourself be “house poor”. I always like to start looking for homes $50,000 to $100,000 under what I was pre approved for. You can always go up in price if you are not able to find a home to meets your needs.
 
Pre-Approved! 
 
Another important reason to get pre-approved is that it will make your offer stronger. When your offer is submitted for a home, be sure you have a pre-approval letter specifically written by your lender for that property. This will make your offer more attractive than an offer that does not include proof or the ability to purchase the home.
 
Once you are pre-approved, don’t wait to get your documents sent to your lender. Ask them right away what they need from you. This can include things like 2 years of tax returns, W2’s, bank account statements, pay check stubs, proof of employment, and other financial papers. If you have recently moved money around, you will have to account for both money come into and out of any accounts you provide.