Many home owners dread the the thought of applying for a mortgage. Let's face it, the paper work, the bank/broker and the documentation is a drag and scary for the first time home buyer. The good news is, if your prepared it can actually go quick and very smoothly.
Things you will need for the mortgage application to go smooth:
Income documentation (paystub's, W2's, etc.)
Proof of asset's (bank account, 401k, retirement, etc.)
Proof of Home Owners Insurance (for refinance)
Mortgage Note (for refinance)
Photo Id & Social Security Card
Credit Report (Provided by lender)
In some cases you may need an extra document here or there but that's pretty much it. If you can get those things together and have your basic employment info ready, all you'll need from there is your self and a pen. After signing, make sure you always obtain copies of your signed docs at the time of the application. This way you can make sure no changes have been made when you sit down at the closing table. If you've ever purchased a car it's pretty similar except there are a few more documents to sign for a mortgage.
Good Faith Estimate:
Listen closely because this part is important. Always take an intense look at the Good Faith Estimate or GFE when signing your mortgage application. This is by far the most important document in the package. Something you want to look for is points. These will be labeled on the GFE as mortgage origination, loan discount or broker fee. There are reasons you would pay points and these should be discussed with your lender/broker. For example is some case you may want to pay points to get a lower than market interest rate. This is called a buy down and the free would be labeled in the loan discount of the Good Faith Estimate. Mortgage origination fee is nothing more than an extra charge the lender is throwing to profit. The broker fee is the same unless that broker has to pay a fee to the lender he/she is placing your loan with. Another key component to look for is the mortgage payoff if you are refinancing. Make sure it is not any more than two mortgage payments higher than what the current balance of your mortgage is. Any more than is not called for.
Remember the mortgage application is just another hurdle you must jump before buying your own home or refinancing to better your home loan situation. But it can be an easy process if you work with a good lender and prepare your self properly. Don't let it overwhelm you. Remember, this is your loan and your in control.
