The complex process of getting a mortgage is made clearer by breaking it down into steps. Here’s a checklist to help do just that.
1. Determine your mortgage limit
- Create your expense snapshot — listing all expenses in your current budget
- Estimate potential homeowner expenses and include them in your snapshot
- Estimate your monthly payments using an online calculator
- Calculate your debt-to-income ratio to determine your mortgage limit
- Decide how you will make a down payment and how much
- Estimate Closing Costs
2. Choose a lender, or several and determine the type of loan that is best for you.
3. Know what is on your credit (lender can help you)
4. Get pre-approved. You’ll need the following information when applying:
- Paycheck stubs for the last 30 days
- One W-2 tax return if you’ve had your job for over two years, or two if otherwise
- Recent credit card statements
- Two bank statements over last 90 days
- Proof of pensions, retirement, disability, or Social Security
- Proof of income from rentals, investments, etc.
- Proof of child support or alimony paid/received
- Loan information on current home (if you own one)
- 401K statements
- Divorce decree (if applicable)
Get a Good Faith Estimate of fees as a part of your pre-approval.
5. Lock in your rates.
6. Bring all documentation to the closing.
Other Useful Information and Links
- Qualifying for a Mortgage
- Choosing a Mortgage Lender
- Mortgage checklist
- What to ask a mortgage lender
- Mortgage Types & Rates
- Private Mortgage Insurance
- Mortgage Rates Fearbusters
- Buying Vs. Renting
- Understanding Mortgage Credit Scores
- Debt to Income Ratios (what are they)
- Loan to Value Ratio
- What does a Title Co. do
- Credit Report Tips, Finding Mortgage with Bad Credit
- What is an FHA Loan
- Bad Credit Mortgage Solutions, Fixing Credit
- Credit Scores and Reports, Mortgage Rates
- Down Payment How much do you need to save
- Mortgage Glossary