Obtaining a Loan

Whether you are seeking pre-approval or have agreed on a purchase price for your new home, you need to "prove" your eligibility for a mortgage. Mortgage lenders typically consider the following factors in determining your borrowing eligibility:

• Income
  You typically need to prove both your monthly income and income-earning history.
• Expenditures
  Both your current and projected monthly obligations are compared to your monthly income. As a general rule, your monthly housing expenses should not exceed 28% of your gross (pre-tax) monthly income. Overall, your total monthly expenses (e.g. housing, auto, student loans, credit card, etc.) should not exceed 36% of your gross monthly income. It is important to note that these are general guidelines and can vary depending on the loan program you select.
• Credit History
  A demonstrated track record of handling financial obligations in a timely manner is a characteristic lenders actively seek. Lenders use your credit report to assess and qualify this track record. By clearly understanding your financial history, lenders can judge the likelihood that you will also handle your mortgage obligation responsibly.
• Down Payment Size
  Although some loan programs only require a small or no down payment, a larger down payment can be considered favorable. Often, the size of your down payment can be increased through a gift from an immediate family member or by borrowing against another asset (such as a 401k plan).

The following income and employment information is generally required as part of the loan process:

• For the employed:
  • Current pay stub showing year-to-date income
  • Current W-2 Form
     
• For the self-employed:
  • Current, signed business and personal income tax returns covering a two-year period
  • Current balance sheet
  • Year-to-date profit and loss statement
     
• For retired homebuyers:
  • Social Security Award Letter
  • Either a 1099 Form or bank statement spanning a two-month time period (all pages)
  • Copy of your pension check and all supporting documentation
     
• Bank account information—Bank account statements spanning the most recent two-month time period (all pages).
   
• Investment information—Including account numbers, current values, and statements spanning two months.
   
• Credit card information—Including credit card company names, account numbers, monthly payment amounts, and outstanding balances.
   
• Other loans (auto, student, etc.) information—Including lending company names, account numbers, monthly payment amounts, and number of remaining payments.
   
• Rental information (if applicable)—Landlord's name, address, and telephone number.
   
• Other information:
  • Name of settlement agent/attorney, firm's name and telephone number;
  • Divorce decrees and separation/alimony agreements (if applicable);
  • List of other real estate owned, including value, mortgage balance, monthly payment.

Secure Your Rate

When applying for a mortgage for your home, you'll have to make a decision about the interest rate option best suited for you.  Make sure you clearly understand the choices below so you can make an informed decision.

• Lock with a float down option—If you think rates may go lower, but don’t want to take a chance on your hunch being wrong, you can purchase our float down option and get the security of a known rate today—plus the opportunity to get a lower rate if market conditions improve. With this option:
  • If interest rates fall, you receive the new, lower rate plus 1/8 percent.
  • You pay a refundable fee of 1/2 percent of your loan amount up front. This fee is credited toward your costs at closing.*
     
• Lock without a float down option—Know a good rate when you see one?  With this option, you may lock your rate at the time of application or any time up to five days prior to closing.
   
• Float your interest rate—You may also choose not to lock your rate at the time of application. You will then have the option to lock your rate at any time during the process, but the rate must be locked at least five days prior to closing. Keep in mind that rates are subject to change at any time, and you are not guaranteed a rate until you contact your mortgage specialist and execute the rate lock addendum