The ABCs of Home Loans

Having recently purchased our first home, my husband and I know how overwhelming and stressful the whole process can be. One of the most confusing parts was the home loan and mortgage process. Luckily, we have a wonderful loan officer who answered all of our many questions and made sure we understood each aspect along the way. She even came to our closing to offer moral support!

If you are applying for a home loan for the first time, don't be discouraged! Here are 3 simple steps to the home loan process from Lisa Munniksma of Custom Publications. I like her simple ABCs to guide you through the process.

A is for "arrange a meeting"
When you meet with a lender before you even begin looking at homes, you can make the whole process flow more smoothly. Meeting with a lender will give you a better idea of how much house you can afford so you can search accordingly.

B is for "bring documentation"
The lender will review your W2 forms or tax returns from the past two years, your most recent pay stub, two months of bank statements, your credit score and any investment and savings documentation you have. This gives the lender a better overview of your financial standing.

C is for "consider your circumstances"
You are preapproved for a home loan based on your borrowing capabilities, not necessarily your unique financial circumstances. Only you know how much you can reasonably afford to pay each month for the next 15 to 30 years. Consider taxes, insurance and private mortgage insurance in addition to the mortgage payments.


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