Unit 3 : Lesson 2: How to shop for a mortgage loan

Step 2. Applying for a loan

After comparing lenders, Tom and Mary decided to go with Mary’s credit union. They were impressed with the way they were treated at the credit union. John Harris had gone out of his way to answer all their questions. The interest rate seemed fair, and they liked the fact that the closing costs were low.

Tom thought Fairway Mortgage might have been right for them if they were in a hurry to have their loan processed. Since they were not, the 30 to 60 days of processing time was no problem. Once they had made the decision, Tom called for an appointment for a loan interview. They received the loan application in the mail two days before the appointment so they could fill it out ahead of time. Filling it out also helped them learn what they should bring with them to the interview.

Once you have selected a lender, you need to call to make an appointment for a loan interview. When you call, ask the lender to send you a copy of the loan application ahead of time. That way you can fill it out in advance, and you will have time to get additional help if you need it. Your local nonprofit housing organization or your real estate sales professional may be able to help you fill out the application. Remember, don’t sign anything unless you understand what you are signing.

If you have a co-borrower, both of you should go to the interview. Ask the lender what information you need to bring along.

Make sure all your questions are answered during the loan interview. At this time, you should find out if the interest rate is locked in and for how long. It should be locked in for as long as you need to complete the closing.

In addition, you should get an estimate of the closing costs. By law, a lender must give you an estimate of your closing costs within 72 hours of the time you apply for the loan. The lender should also tell you how long the loan will take to process.

You should decide if you want to hire a real estate attorney to look over the application before you sign it. In this case, you will want to ask if you can take the application home with you and bring it back later.

Remember, some lenders require you to pay an application fee at the loan interview. Ask ahead of time to be prepared.

What to bring to a loan interview

• What to bring to a loan interview
  
  
• The purchase and sales agreement for the house.
  
  
• Your bank account numbers, your bank’s address, and your latest bank statement.
  
  
• Your pay stubs, W-2 forms for the past two years, or other proof of employment.
  
  
• Your income tax forms for the past two years.
  
  
• The names, addresses, and phone numbers of your employers and past employers.
  
  
• Information about all your debts, including loan and credit card numbers and the names and addresses of those you owe money to.
  
  
• Canceled checks or other paperwork showing your monthly rent payments.
  
  
• A qualifying worksheet (such as the one on this page) if you have one filled out.
  

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