Mortgage Center - Guide To Getting a Mortgage

#1	Decide which type of mortgage is right for you
	The 2 most common types of mortgages are Fixed Rate Mortgages and Variable Rate Mortgages. Lenders will typically offer 15-year and 30-year option for both Fixed Rate and Variable Rate Mortgages. The interest rate on an Fixed Rate Mortgage never changes from the moment you lock-in your initial rate. A fixed rate mortgage offers security and regularity. When rates are low and you plan on staying in your new home for a while, it's an ideal option. A variable rate mortgage allows the borrower to take advantage of low rates -- the interest rate is calculated on an ongoing basis at prime minus a set percentage. For more information on choosing the right option, check out our article "Fixed vs. Variable Rate Mortgages."

#2	Determine How Much Mortgage You Can Afford
	Use our Payment Calculator to calculate your monthly mortgage payment and find out how much you can afford. Generally speaking, to qualify for conventional loans your housing expenses should not exceed 28% of your gross monthly income. Furthermore, most mortgage lenders look for an overall debt to income ratio not exceeding 36%.

#3	Check Your Credit
	Take a look at your credit before any lender does. If there are any problems, try to clear them up before you meet with a lender. Plan ahead and pay down your credit card debt as much as possible for several months before you apply for a mortgage.

#4	Research and Choose a Lender
	Just as there are many types of mortgages to choose from, there also many lenders to choose from. Start by putting together a list of lenders in your area. Compare rates for similar loans between these lenders, and talk to the loan officers to ensure that you will feel comfortable working with him or her. Ask your family, friends, neighbors and co-workers about their mortgage lender. Your REALTOR® can also recommend reputable lenders.

#5	Get pre-approved or pre-qualified for a loan
	The first thing you should do when shopping for a home is become pre-qualified, or better yet, pre-approved, for a loan. The process is typically free and involves filling out a short application. To expedite the process, many lenders allow this application to be submitted over the phone or even on-line! The lender will use the information you submit to determine how much you are able to borrow. This information is very helpful because you will know what homes you can afford and you won’t waste time looking at homes you can’t afford.

#6	Collect all the necessary information
	Your lender will need to know your employment history, finances and information about the house you are buying. Once you have chosen a lender and you are ready to purchase a home, you will need to gather the following information: W-2 forms for the past two years for all borrowers Federal income taxes for the past two years if you are self-employed, commissioned, bonused or own rental property Recent check pay stubs Documents showing any other sources of income you plan on using A complete list of your creditors including balances and monthly payments Investment records including mutual fund statements, 401k statements and retirement plans for the most recent quarter Recent bank statements Any additional information your lender may require
#7	Apply for a loan
	Complete a formal loan application either online at your lender's website, over the phone or in person. You will need the information collected in the previous step to complete your application, and your lender will most likely require you to send some of this information to them. After you've completed the loan application, your lender will run a credit check and begin verifying the information you provided.

#8	Getting the final word on your loan
	You should expect the approval process to take about 30 days. If your loan is approved, you will generally be notified by a letter of commitment. Your commitment letter will include the terms of your mortgage, including the interest rate and points. Once you've received your loan commitment, the next step is to close your loan and buy your home. Congratulations!

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