How To Apply For A Mortgage: Everything You Need To Buy A Home

Published on: August 17th, 2022 | Written by Jimmy Vercellino

how to apply for a mortgage

But with so few resources available to help guide you through the mortgage application process, it’s easy to become overwhelmed by the amount of paperwork and documentation required to secure your home loan.

Not only that, but failing to have the proper information ready before you apply for your mortgage can drastically slow down the application process and force you to miss out on the home of your dreams.

Today, we’re breaking down everything you need for a smooth mortgage application process, so that you can take the first steps toward homeownership fast.

How long does it take to apply for a mortgage?

While the time period between your application and the official closing of your home loan can vary greatly depending on the mortgage lenders, most mortgage applications take an average of 45 days to process.

This means that you should have all of your necessary documents ready to go before you even fill out a mortgage application, so that you can avoid a potential hold-up in the approval process.

If you’re looking to compare mortgage rates, but aren’t ready to commit to completing the entire process just yet, it’s a good idea to get pre-qualified for a loan instead, allowing you to see how much mortgage you could be approved for.

And while pre-qualification letters don’t hold the same value as an official pre-approval, they can be a great resource for potential home buyers who are just beginning to evaluate their loan options.

You can read more about the differences between pre-approval and pre-qualification here:

What documents do I need before applying?

Unlike getting pre-qualified for a home loan, starting an official loan application is a time-consuming process that requires extensive documentation on your end.

Before you begin filling out applications, you should take extra time to ensure that you have all of the recommended documents, saving you time and stress later down the line.

Current Credit Report

It’s no secret that having a relatively good credit score, which most mortgage lenders consider to be 670 or higher, is an essential part of the loan application process.

That’s why it’s important to have a clear picture of your credit history before applying for your mortgage, so that you can proactively address any past credit issues like unpaid credit cards, medical debts, and other concerns that could impact your score.

An easy way to do this is to simply monitor your credit score regularly, so that you won’t be hit with any surprises when a lender pulls your credit report.

Verification Of Income

Next, you’ll need to verify your current income or employment status, regardless of if you’re a W2 employee or an entrepreneur.

There are several documents that you can use to satisfy this requirement, but the most common income verification tools include…

  • Pay Stubs
  • Annual Tax Returns
  • Bank Statements
  • 1099 Records

…and any current document that proves you make enough money to adequately cover your mortgage payments.

Government-Issued ID

Because a mortgage home loan is a legally binding contract, you’ll be asked to confirm your identity and verify that you’re eligible to buy property in the United States.

This step might include providing your mortgage lender with your social security number or a government-issued photo ID such as a driver’s license, military identification card, or a U.S. passport book.

No matter which option you choose to use, you should be sure to have these IDs ready as soon as you fill out your application.

Gift Letter References

Of course, buying a home doesn’t always mean paying for the entire down payment yourself.

In many cases, friends and family members may off to pay a portion of your loan as a gift, whether that looks like a $1,000 or the entire down payment. If you plan to use a gift as part of your down payment, you’ll need to have a written letter from the person giving you the money to present to your lender.

From there, they may be subject to additional verification standards, depending on the policies for your loan.

Rental History Records

Finally, one of the lesser-known tools that many mortgage lenders use to determine your home loan eligibility is a rental record from any places that you’ve previously lived.

This usually comes into play if the person applying for the loan has a limited credit history or has never owned a property before, allowing the lender to verify how much you’re able to spend on monthly payments.

You can get this information by connecting with your current or previous landlord, as long as you’re in good rental standing.

How can I get a home loan estimate?

Once you have everything ready for your home loan, you can start comparing loan estimates by choosing a few mortgage lenders who fit your needs and filling out an initial application.

You can break this process down into 3 simple steps…

Pick Your Loan Type

Whether you’re a first-time home buyer, a veteran, or a rural farmer, there are specialized home loans for nearly every financial situation.

These loans come with varying requirements for down payments, interest rates, and more, so you should be clear on which type of loan you’re applying for before you start looking at applications.

Fill Out An Application

After you’ve determined what type of loan you qualify for and found reliable lenders who meet your needs, you can gather up your documentation and start filling out mortgage applications with confidence.

Compare Mortgage Rates

Once you receive a loan estimate from each of your applications, it’s important to take the time to compare the numbers, so that you can pick the best home loan for your unique needs.

Some of the data you’ll want to compare include…

  • APR (Annual Percentage Rates)
  • 5-year total charges, including mortgage interest rate, principal, and insurance
  • Monthly mortgage payments
  • Estimated percentage paid in interest

These numbers will give you a good idea of which loan is the best option for you, so you can pick your mortgage lender and start house hunting.

Ready to start your loan application journey?

No matter what type of loan you’re interested in, working with a lender who cares about you and your family can help alleviate the stress of the mortgage application process and improve your chances of buying a home you love.

First Western Trust is an industry leader in the mortgage lending space, specializing in walking buyers from all backgrounds through every step of the home loan process with care and compassion.

Contact our Highly Motivated Vercellino team today by calling (480)-800-8387 to start your application process today.

Buyer Education