There are lenders, banks, and mortgage brokers who can make the dream of owning a home a reality. Many have a simple interview that will step you through the process of determining what you may be able to afford. The three major things to do to get the best loan for your purposes are:
Understand the paperwork
Improve your eligibility
Choose a loan
The more organized you are, the sooner you can get a loan commitment in hand.
To streamline the process and improve your chances
Order a copy of your credit report Your lender will also order a copy, but you should see it first. That way, you can clear up any credit problems before you submit your loan application. If you find problems, start taking steps to correct them.
Organize your recent tax returns and financial documents The lender will need your financial information to determine how much you can borrow. If you don't have all the paperwork, you can get copies by contacting your tax prepare and other people who deal with your personal finances. Check to make sure you have everything you need
Documents your lender may request
Copy of purchase contract
Last two tax returns, plus accompanying Federal W-2 and 1099 forms
Last two months bank statements
Pay stubs for the last 30 days
Most recent statements for all your credit card accounts
Coupon book for any outstanding home, auto, school or other loans
Bank and brokerage-account statements for the past three months
IRA/Keogh/401(k) statements for the past three months
Title of any cars you own (if less than five years old)
Other documents you may need
Recent profit-and-loss statements and related documents (if you're self-employed)
Transcript or diploma (if you've been a student in the last two years)
Relocation agreement (if you were transferred into the area)
Sales contract of home you currently own (if selling current home is required to purchase new home)
Divorce or legal separation documents
Award letter and copy of most recent check if you're on Social Security, retirement, disability, or if you receive funds from legal settlement
Get contact information from your human resources department. Find out who is authorized to release information about your employment status. Provide the correct contact name and telephone number to the lender to avoid lengthy loan-processing delays.
Get pre-approved for a loan before you start shopping for a home
You don't have to pay for pre-approval through most lenders, and you'll get a head start on finding a loan.
If you take the time to get pre-approved:
You know how much you can borrow, so you don't waste time looking at properties you can't afford.
You have an edge when you make an offer, because the seller knows you're likely to get a loan and close the deal.
You save time on closing your loan, because you've already assembled your paperwork.