Your Initial Lender Meeting
The loan approval process generally begins with an initial meeting at which the prospective home buyer and the lender discuss the potential loan. You will need to bring information to verify your income and long-term debts.
Often people prefer to meet with the lender before house hunting to determine in advance what price range they can realistically afford and the mortgage amount for which they can qualify. This step is called prequalification and can save you much time and trouble by assuring you are looking in the appropriate price range.
For your first meeting with the lender, you should bring:
- A purchase contract for the house, if you have one.
- Your bank account numbers and the address of your bank branch, along with checking and savings account statements for the past two to three months.
- Pay stubs, W2 withholding forms, tax returns for two years, or other proof of employment and income verification.
- Divorce settlement papers, if applicable.
- Credit card bills for the past few billing periods, or canceled checks for rent or utility bill payments, to show payment history and amount of revolving debt.
- Information on other consumer debt, such as car loans, furniture loans, student loans and retail/credit cards.
- Balance sheets and tax returns, if you are self-employed.
- Any gift letters, if you are using a gift from a parent, relative or organization to help cover the down payment and/or closing costs. This letter simply states that the money is in fact a gift and will not have to be repaid.
Having these items on hand when you visit the lender will help speed up the application process. Usually, you will need to pay an application fee and appraisal fee when you submit the mortgage application. This is done only after you have negotiated successfully on a home and the seller has accepted your offer. Generally, there is no fee for prequalification.
After the initial meeting with the lender, you should have a general idea if you qualify for the size and type of loan you want. The lender should let you know if you qualify for the loan in 30 to 60 days. If you are denied a home loan, the lender must explain the reasons. If this happens, the lender usually will discuss any options with you.