Important Steps When Applying for a Home Loan

Blog posted On September 28, 2023

Purchasing a home, especially your first home, will be one of the most important transactions of your life. When you apply for a mortgage, there are some critical steps you should take. Below are some of the most crucial steps that you should take prior to shopping for your first home.

Decide how much of a house payment you can afford each month. Ultimately, it won’t be your real estate agent, your lender, or anyone else who will be making your mortgage payments each month for you, so you need to decide what works for you. If you get stuck or don’t know where to start, we can help. Just get started on your preapproval.

Start Early. This cannot be overemphasized. There are different requirements for different mortgage programs. Processes may need to happen before you are in a buy-ready position; these include:

  • Paying down or paying off debt. This could serve two purposes. One is to raise your credit score. The other is to lower your debt-to-income ratios.
  • Putting money away for your down payment and other expenses related to the purchase of a home, such as appraisals, closing costs, taxes, etc.

Prepare your documents. An important step that you can take prior to applying is to come prepared, meaning that you’ll have all the documentation that your lender asks for, and needs to be able to provide you with an accurate estimate of what you’ll be able to afford when home shopping. Here are some important ones to start gathering:

  • Proof of income and employment (pay stubs, tax returns, W-2 statements etc.)
  • Documentation of financial assets (bank statements, etc.)
  • Residential history (previous two years' worth)
  • Your credit history (it's also a good idea to check your credit report - not score - here)
  • Identity information like your driver's license, Social Security card, and date of birth in order to apply
  • Tax transcripts (processor will order)

Once you have found a property to purchase, the lender may ask you for additional documents. Please know that they are all necessary, and provide them promptly, to keep your loan on track. To get started, click the get started button above!