Contacting several mortgage companies is essential in finding the right home loan since mortgage companies’ rates and loan programs can differ. The first step in finding a home loan is to contact several mortgage companies in the area in which you are purchasing or refinancing. Local loan officers are familiar with their local market and local real estate trends, which enables them to better assist you. Following these simple steps will assist you in finding a home loan.

Get Prequalified

Prequalification is a necessary step in the home loan process. Knowing how much home you can afford enables you to shop for a home in your price range and allows you to find a home loan you can afford. Contact several local mortgage companies. The loan officer at each mortgage company completes a brief interview which can be done by phone. They ask for your income and employment information. Most lenders require that you have been in the same line of work for the past two years. They also ask for your monthly debts. This enables the loan officer to calculate the loan amount you qualify for. The loan amount is based on your income and expenses at this time. It is only a prequalification–the loan officer does not obtain a credit history.

Compare Mortgage

Companies Now that you’re prequalified, ask the loan officer what type of loan programs they have available for the type of financing you need. For instance, if you are purchasing a home and you are a first-time home buyer, they may have a loan program that offers first-time homebuyers a low rate with low down payment options. Or perhaps you are seeking a loan to purchase and repair a home. They may have a loan program that includes the costs of the repairs in the loan. Next, compare their rates in addition to their closing costs.

Get Preapproved

After comparing several mortgage companies, you now have chosen which company can offer you the best home loan. Now it’s time to get preapproved. Getting written preapproval is an important tool when shopping for a home. It is buying power, and lets the real estate agent or seller know you are working with a mortgage company and you’re ready to buy. In order to receive a preapproval from the loan officer, you now need to submit your credit information. The loan officer obtains your credit history and completes an evaluation. After reviewing your credit, your loan officer discusses which loan programs are available to you. Upon deciding on a loan program along with a quoted interest rate, your loan officer can issue a preapproval.

Applying for a Home Loan

After you have been preapproved, found a home and have made an offer, it’s time to apply for your home loan. With a standard home loan application, all of the information you have previously given to your loan officer is listed. Additionally, all of your debts that appeared on your credit report need to match the debts that you list on your loan application. A description of all of your assets must be listed as well: Be sure you have a positive net worth. List assets such as personal property to assist you in obtaining a higher net worth. Most borrowers are in the $30,000 to $40,000 range. Try to get an accurate value of any vehicles that you may own by visiting Kelly Blue Book online before filling out your loan application.

Proof of Income and Assets

When applying for a traditional full documentation loan, proof of income in required. You are asked to submit recent paystubs, W-2’s and the past two years’ tax returns. You may be required to submit bank statements as well as any 401k statements or other related documents.

Last Steps

Now that you’re found a home loan and applied, your loan officer submits your application to the departments in which processing and underwriting takes place. Most mortgage companies take approximately 30 days from start to closing.