Apply for a Mortgage---How to Prepare

When you apply for a mortgage to buy a home, there are a number of factors that can influence the rate, terms, downpayment and your ability to qualify for the loan at all. When you apply for a mortgage, the loan officer will gather basic personal information on you and your spouse including:

Employment information, both current and previous

Exact income information

Asset information covering all liquid assets

SSN, date of birth, etc. to pull credit reports

Approval standards have risen in the past couple of years as a result of the crisis in the mortgage credit markets. Today, unless you are getting a VA loan, you will have to make a down payment of at least 3% of the purchase price when you buy a home. In many cases, buyers will have to make 10% or even 20% down payments.

Before applying for the loan, make sure that you can come up with the following documents:

2 recent paystubs

Last 2 years of W2s or last 2 years of complete tax returns

2 most recent bank statements

2 most recent statements showing any other liquid assets.

Having these documents available for the loan officer at the start of the process will allow him or her to submit your loan application with precise and accurate information. Your approval depends upon your credit history, your ability to document the source of the funds that you will use for a down payment, and your ability to prove your income.

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