It’s no secret that the home buying process can be confusing but understanding how to obtain a mortgage doesn’t have to be a mystery. With a little preparation, you can feel confident as you navigate through the application process.
Process of Applying for a Mortgage
- The first step is to meet with a mortgage lender. We will help you get pre-qualified so that you have an idea of how much you may qualify for. A pre-qualification meeting can last about 30 minutes.
- Shop for your home. With your pre-qualification letter, a licensed agent will be happy to help you find your home. This is the fun part!
- Once you’ve found the home you want to buy, the bank will verify the information submitted on your application using the documentation listed below.
- Review and understand rates and loan estimates. Mortgage rates vary according to market conditions and individual circumstances. Research and understand what your long-term financial obligations will be.
- Review your loan documents. Once your loan is approved and your inspection, appraisal and title search are complete, your lender will set a closing date and let you know exactly how much money you’ll need to bring to your closing. Check out our online financial calculators to help paint a clearer picture.
- Close on your home. During the closing, ask about anything you are unclear about. When the closing is finished, you’ll be a brand-new homeowner!
After you are pre-qualified for a mortgage, the exact items you need to submit will depend on your individual situation. Those who are self-employed will likely be asked to provide different information than someone who is employed by a company. Those instances are noted below.
What You Need When You Apply For A Mortgage
In general, expect to be asked for the following documentation to ensure a smooth approval process:
Personal ID
A copy of your photo identification, which may be a state-issued ID card, a driver’s license or a passport. This simply confirms that you are who you say you are.
Social Security Number
Your social security number will be part of your mortgage application. You don’t need the actual card; the number itself will suffice.
Bank Statements
You may be asked to provide bank statements covering the last two years. The lender will use these to confirm that you have sufficient income, and to verify where your funds are coming from. If you’re self-employed, bank statements will almost certainly be requested.
Profit and Loss Statements
Self-employed mortgage applicants will need to provide two years’ worth of profit and loss statements from their business. If you are unfamiliar with this report, any bookkeeper or CPA can assist you in generating it and verifying its accuracy using your accounting software.
Form 1099
Independent contractors will need to submit all 1099s from the last two years. This helps the lender confirm your income.
Miscellaneous Financial Information
In addition to the information that you provide, your lender will pull your credit report to review your credit history. You don’t need to do anything for this step, but you should try to ensure that your credit report is as good as possible before applying for a mortgage.
If there are any unusual or extenuating circumstances, these will also need to be documented. For example:
- Proof of bankruptcy settlement
- Proof of collections pay-off
- Loan forgiveness letter (i.e., PPP loan forgiveness, etc.)
- Letter of any funds being gifted
Start The Mortgage Application Process Today
The process of getting approved for a mortgage is easier than you might think. Contact us today to learn more about your mortgage options and to get pre-approved. With our help and the information above, you could be in a new home sooner than you may have dreamed possible. Call us at 1-888-831-1500 for assistance, visit one of our Field and Main Bank locations in Central and Western Kentucky or Southern Indiana or apply online today.
