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The Home Buying Process: The Mortgage Application

March 3, 2021
Buying a house involves more than open houses and bidding wars, right? It means you will be making a huge financial decision and take on the responsibility of a mortgage. The mortgage application process seems daunting and even overwhelming considering the weight of the decision and the scope of the process. However, if you’ve followed our home buying process series, you will complete this step with ease.

Breathe, you’ve been here before. If you’ve been pre-approved, you’ve already completed the majority of a true loan application. The only big difference is that this time you’ve found a home you love and are under contract. Congratulations! 

The application is the last step you must complete before your lender can take over the responsibility of getting you to the closing table. In upcoming blogs we’ll walk through all the behind the scenes stuff that happens after you hit submit and before you officially get your keys to your new home. 

For now, let’s talk about the actual mortgage application and what you should expect during the process.

When Do I Complete A Mortgage Application?

The first steps of the home-buying process are having a consultation, getting pre-approved and then finding the home of your dreams. For more information on exactly what those steps look like head over to our blogs on Getting Pre-Approved and Finding Your Dream Home. Now that you’ve found your new home and had a contract accepted, it is time to complete your loan application. 


Most lenders have a variety of ways for you to complete your application so that you can choose what makes you most comfortable. If you wish to complete the application over the phone, in-person, via a weblink or even via a phone app that’s all possible! In most cases, a completed application will require a combination of a few different methods to ensure all documentation and applicable questions are covered.


Components of a Loan Application

First things first, this part of the process requires a lot of paperwork and answers to lots of personal questions. You should expect to enter into When completing the mortgage application your lender will gather all of the information necessary to submit a full package to their operations teams to ensure there is no problem lending you the amount of money necessary to buy your new home. Much of the loan application is simply filling in the blanks so that there is a complete picture for all the people behind the scenes that aren’t talking to you directly. So let’s break down each section of the mortgage application and what you should expect.


Basic Information About Your Loan 


This includes information like how long it will take you to pay off your loan, if it is a purchase or refinance and what program and product you will be using. Don’t worry, you don’t need to know this information yourself. Your loan officer will talk through all of your options with you and together you will decide what is best for your specific situation. If you’d like to learn more about the available home financing options to you, head to our products page to see which may be right for you.


Borrower Information and details of the transaction: 


The next major segment of the loan application is the borrower and co-borrower information. This will include employment information, monthly income, housing expenses, assets and liabilities. Your lender will need a history of all of this information, so expect to be asked for a specific number of months or years of documented history for each of these items.


Additionally, depending on some of the information in this section, such as employment type, we will need additional documentation. A list of all of the basic documents needed to verify this information includes: 


  • W-2s for the previous two years
  • Paycheck stubs for the last 30 days
  • All pages of you checking and savings account statements for the last two months
  • Most recent statements for your 401(k)s, stocks, and other investments
  • Photo ID


You will also need to disclose the details of the transaction, or in other words, communicate to your lender all of the relevant financial details involved in your loan. Are you receiving a gift for downpayment? Do you have a property to sell or rent out? All this information should be included to ensure that your loan runs smoothly through the rest of the process. 


Declarations


The declarations section asks you questions pertaining to the property, your funding and perhaps most importantly your past financial history. This information isn’t meant to make it more difficult to get a loan or to overwhelm you. The information is there to help the lender have a full picture of your unique situation and help you find the best solution moving forward. 


Acknowledgement and agreement and information for government monitoring purposes


The last two sections of the mortgage application are you simply acknowledging what your legal obligations are when you sign the loan application and demographic information.  The purpose of collecting this information is to help ensure that all applicants are treated fairly and that the housing needs of communities and neighborhoods are being fulfilled.


For residential mortgage lending, Federal law requires that we ask applicants for their demographic information (ethnicity, sex, and race) in order to monitor our compliance with equal credit opportunity, fair housing, and home mortgage disclosure laws. The law provides that we may not discriminate on the basis of this information, or on whether you choose to provide it. The law also provides that we may not discriminate on the basis of age or marital status information you provide in this application. If you are uncomfortable filling on the demographic information you can choose to abstain from answering. 


It is important to adjust your mindset about the mortgage application process from one of stress to one of excitement. You are formally applying to become a homeowner and that’s something to celebrate. Remember that through this process, you should have a reliable and experienced loan officer helping you every step of the way. They will advocate for you and your goals and work to help you navigate the home buying process as smoothly as possible. 


Once the application is complete, the loan will be submitted to processing and you are one step closer to closing on your home!


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Q1 Recap

By Mikaylah Collins • April 12, 2023
We've begun to see signs that the Spring Market is here and could be robust! Here is what we know: According to NAR, home sales were up 14% in February over the previous month which marked the biggest monthly increase since July 2020. While March results are not yet published, the mortgage industry saw an increase in purchase applications for the 3rd straight month; a great sign for the housing market. Driving much of this activity is the stabilization of rates in January & February and lower interest rates this past month. We’re starting to see signs of a slowing economy and the markets are now pricing this in. This week we saw the 10-yr Treasury drop under 3.4%, a level it has not reached for quite some time and the lowest it’s been since September 9, 2022. This is great news for consumers as decreasing rates mean more home affordability. Over the past year, most markets have seen home prices stabilize if not even decline, albeit by a very small amount. This stabilization was still a relief for homebuyers as it helped to offset higher interest rates. As rates continue to decrease, we would expect home prices to again increase due to demand increases. In addition to increased demand, there is still a shortage of homes for sale nationwide and that will continue to worsen as more and more homebuyers enter the market.  So what does it all mean? Now is a GREAT time to buy a home! Rates and home prices are stable, there is not as much competition as there will be when rates do decrease, and buying a home is still extremely affordable for most. Once rates fall, we will likely see home prices rise and the competition for the shortage of homes will increase alongside it making the window of a buyer-dominated market very small.

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Finding The Right Listing Agent For You

By Sarah Rubin • December 15, 2022
Buying a home is a huge investment and one we talk about often - BUT the flipside is that you have an opportunity to cash in on that investment when you’re ready to sell your home! While you do have the chance to cash-in, a lot more work goes into selling a home than you might think! If you are considering selling your home, working with a listing agent will help you market your home, negotiate with potential buyers, work through paperwork, and ultimately close on your home! So what is a listing agent? In its most basic terms, a listing agent is a real estate professional who represents the seller in a real estate transaction. The listing agent lists the home for sale and works on behalf of the seller to sell the home at the best price and terms for their client. Listing your home is a BIG deal and it is not a place to try and DIY. But why can’t you just grab a sign at Home Depot and try and sell yourself? Well, there are lots of reasons some of which include: Professional consultation: A listing agent will walk you through each step and tell you what to expect along the way! They should understand the specific community you’re in and the current market environment and will help you determine a competitive but realistic asking price for your home. Marketing and selling your home: Your listing agent will list your home on the multiple listing service (MLS) in order to better market your home to potential buyers. They also can make staging recommendations and hire a photographer to best show off your home and its features. They’ll schedule house showings, and can be present to answer any questions. Communication and negotiation: Communication is key to both buying and selling a home in order to minimize stress and misunderstandings. Listing agents take care of this important task, by staying in touch with interested buyers and their agents, fielding questions, handling paperwork, and negotiating the final sale price and terms. Recommendations: Seasoned listing agents might come with a list of professionals who they have worked with in the past that they enjoy working with in order to make the selling process smoother for you! Some of these professionals include: real estate attorneys or title companies, inspectors, stagers, those who specialize in home improvement AND of course trusted Loan Officers. How do I find the right listing agent for my situation? In order to find the right listing agent for you, make sure your agent is licensed and has experience, references, and a professional website where you can learn more about them and their qualifications. Most real estate agents work with both buyers and sellers, but some might specialize in one or the other. Once you find a few agents through referrals or online research, meet with them in person to ensure they meet your needs and work well with your personality. It is also important to ask questions during your meeting with them and it’s imperative that you determine what you’re looking for in an agent so you make sure you are happy with the product being delivered. Selling a home can be stressful, especially for first-time sellers. A listing agent can help by taking on some of the burden and providing the information and resources needed to help sellers make informed decisions. We work with agents on both sides of the transaction – if you have any questions or would like a recommendation for an agent in your area, please reach out to us!
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