Buying your first home is an exciting milestone. It’s a big step that can seem scary, but we are here to guide you through the mortgage application process. This mortgage application checklist will help you understand the steps in the process, what will be expected of you, and how to get ready to apply for a mortgage.
What To Do Before You Apply For A Mortgage
If this is your first time applying for a home mortgage loan, it’s a good idea to get organized and collect some information before you start the process.
Check Your Credit Score
Your credit score is a three-digit number that communicates your history with credit. Do you pay your bills on time? Have you ever defaulted on a loan or credit card? Have you proven yourself able to juggle different kinds of credit accounts without issue? How much of your credit are you currently using compared to your total borrowing limit? These factors go into calculating your credit score.
Checking your credit score before you apply for a mortgage lets you know if you’re ready to proceed or not. If your credit score is below the required amount, you may need to work on improving your credit before you apply for a home loan.
You may be able to access your credit score for free through a credit card account. If not, you can view a free approximation of your score through apps like Credit Sesame and Credit Karma. You can also pay for a credit score report from FICO or any of the major credit reporting agencies.
Save For a Down Payment
Most types of mortgages require a down payment. Not only is this required in most cases, but it helps you establish equity in your home and lowers your mortgage debt. The less you need to borrow because of your down payment, the lower your monthly mortgage payment will be.
20% is the traditional down payment amount. If you can manage it, putting 20% down on a conventional mortgage means you won’t have to pay for Private Mortgage Insurance (PMI), an extra monthly cost that’s usually required when you put less than 20% down.
Find Your Home
This is often the most fun part of the homebuying process. You can go to open houses or find a real estate agent to arrange private showings in Western Kentucky, Central Kentucky, or Southern Indiana. Ask friends and family to recommend real estate agents and don’t be afraid to meet with several before choosing one. Once you find your dream home, it’s time to apply for a mortgage.
Homebuyer’s Application Checklist
When you’re ready to apply for a mortgage, these are the documents you will need for the process:
Identity and Income Verification
- Prior two years addresses and dates of residence (no documentation required)
- Social Security number or tax ID
- Color copy of driver’s license or state-issued ID
- Prior two years employment information, including employer contact and dates of employment
Income and Tax Documents
- Two most recent W2’s and two pay stubs for all income sources
- Two most recent and complete bank statements (including any blank pages)
- One most recent retirement account state (if applicable)
- Two years of federal tax returns, including tax applicable schedules if you are self- employed, have rental income, farm income or additional W2 reported income.
- Alimony, child support or separate maintenance documentation if you wish to have it considered as basis for repaying obligation.
- Additional information may be required such as a divorce decree (if applicable) and/or proof of extra income, including rental, dividends, Social Security, retirement, disability, pension or welfare, (supporting documentation is required). Bring original Social Security Award Letter (if applicable)
- Balance owed on all liens attached to the property, including all mortgages as well as any home equity loans or lines of credit.
- Most recent mortgage statement (if applicable)
- Most recent property tax bill (if applicable)
- Most recent hazard insurance declaration page
- Most recent flood insurance declaration page (if applicable)
Keys to A Successful Loan Closing
When you apply for a mortgage, Field and Main will take a snapshot of your financial situation. Our Mortgage loan officers will look at your documents, credit score, and evaluate your financial situation to determine your eligibility. There are some things you can do to help the process go more smoothly, as well as things you should avoid.
Do:
- Ask your mortgage lender questions anytime you are unsure about something.
- Return items requested by your loan officer as quickly as possible.
- Supply all pages of requested documents such as tax returns or bank statements.
- Pay your bills on time.
- Obtain a homeowners insurance policy. The Loan officer will tell you what amount must be insured.
Don’t:
- Change jobs without speaking to your loan officer.
- Open new credit card accounts, loans, debts, or co-sign for a loan without talking to your loan officers. This includes financing new items for your home such as appliances or furniture.
- Make a large cash or credit purchase without speaking to your loan officer.
- Pay down or pay off any debts without consulting your loan officer.
- Move money between accounts without consulting with your loan officer. The U.S. Patriot ACT and prudent underwriting guidelines require source documentation of any large deposits (Usually if more than 25% of your monthly income).
Ready to Start the Mortgage Application Process?
Field and Main is your community bank and local mortgage lender in Henderson, Lexington, and Cynthiana, Kentucky, and Evansville, Indiana. We are here to help guide all your financial needs today, tomorrow, and wherever you are. When it comes to mortgage loans, our goal is always 30 days from application to close on your home. Whether you’re buying your first home, dream home, or a vacation home, we are here to help you with every step along the way. To apply for a mortgage, fill out our online mortgage application, visit one of our branch locations in Western Kentucky and Central Kentucky, and Southern Indiana, or call us at 1-888-831-1500 with questions.
