Are you a first-time homebuyer and getting ready to apply for a mortgage loan? If this is your case, you will have to provide your lender with personal financial information as well as information about the house you want to finance.
By now you have probably heard from family, friends or simply reading online to request a Loan Estimate from three or more lenders. But are you familiar with what step needs to take place in order to receive a Loan Estimate? Even if you just want information, to request a Loan Estimate you must complete an application.
To complete an application, you will need to submit the following six key pieces of information:
- Your name (copy of a US picture ID such as your driver license or passport)
- Your income (last month of paystubs plus last 2 years of taxes and W-2s or 1099s)
- Your Social Security number (so the lender can check your credit)
- The address of the home you plan to purchase or refinance (a specific house address will be needed)
- An estimate of the home's value (loan officer can guide you but the lender will need either purchase price or estimated value if house loan is refinanced)
- The loan amount you want to borrow (typically this would be the maximum loan amount allowed per loan program guidelines to be financed after deducting down payment or simply loan amount desired if house loan is refinanced).
Keep in mind although you're not required to provide documents to the lender in order to get a Loan Estimate, it's a good idea to provide them as the more information the lender has the more accurate your Loan Estimate will be. If you decide not to provide documents keep in mind loan programs have many additional guidelines which may disqualify you from loan approval. Therefore is always a good idea to provide documents to confirm your Loan Approval.
Each lender is required to send you a Loan Estimate within three business days of receiving your six key pieces of information.
Once you're ready to choose a loan offer, you need to notify the lender that you are ready to proceed with the loan application and complete the intent to proceed. If you don't notify a lender that you'd like to proceed within 10 business days, the lender may revise the Loan Estimate or close your application as incomplete and you may need to start over. The 10 business days are calculated from when the lender delivers the Loan Estimate to you or places it in the mail, whichever is earlier.
Once you've notified the lender that you would like to proceed with an application, the lender may ask you to provide additional information and documents to verify the information you have already submitted. The lender processes this information and may follow up with you to request additional information or clarification. Once the lender has received all the necessary information, the lender approves or denies your loan application.
The Loan Application process can be complicated and difficult or a simple and easy one. This will always depend on the applicant’s decision on how to proceed. The best way is to research your options and once an experienced loan officer offering most value is found work hand by hand from application to closing.