Very few people are able to pay for a new home with the cash in their pocket. Instead, we rely on home loans
. A home loan
can help you purchase the house that will not only become your home, but will also be one of the biggest investments of your life. Your choice of home loan will affect your financial situation, your everyday life, and your happiness for years to come, so it's crucial that you make an informed and carefully considered choice. Read on for step-by-step instructions on how to apply for a home loan.
1. Assess your financial health and research lenders and loans. Can you afford to buy a house right now? Before you apply for a home loan, take a moment to consider your income, your savings, your debts, your credit score, and how much you can afford to spend on mortgage payments each month. If you're confident in your financial health, you can begin researching lenders and loans to find the perfect match for you and your family.
2. Get pre-approved.
Before you start shopping for a new home, we recommend that you get pre-approved to facilitate the home buying process. Be aware that pre-qualification is not the same thing as pre-approval. Getting pre-qualified will give you an estimate of what you can afford. It can be used as a guide, but it should not be viewed as official approval by the lender. Pre-approval, on the other hand, is a more in-depth process in which a lender evaluates your assets and credit and pre-approves your capability to get a loan. If you are ready to get pre-approved, get started by using our online loan application
3. Find a home. You should only begin shopping for a home once you know what you can afford, preferably through the pre-approval process. Then, when you find your dream home and are ready to make an offer, you can present the seller with your pre-approved loan document. Not only will this show the seller that you're serious about buying the house, but it will also prove that you are nearly guaranteed to get the required loan. If you're competing for the house with another buyer, this could make or break the sale.
4. Gather the necessary documents. To start the process of securing your loan, you will need to provide the following: (1) the contract for the property you are purchasing, (2) your most recent 30-day bank statement(s), (3) proof of income, and (4) your home insurance agent's contact information. For proof of income, you can bring your most recent 30-day paycheck stub, a W2 form, an SS Award Letter, or retirement/pension/investment income verification. If you're self-employed, you will need to provide tax returns for the last two years.
5. Finish up. Now that you've found the right home as well as the right home loan, you can get final loan approval. You will fill in the property details on your pre-approval documents, completing the application. After that, the home will be appraised and the lender may request more information about the home. When the lender approves both you (the borrower) and your desired property, the loan will be complete!
Learning how to apply for a home loan can be a long and somewhat complicated process, so choosing the right lender is essential. Your lender should be happy to explain the process in more detail and answer all of your questions and concerns.
If you're interested in applying for a home loan, our Mortgage Team would love to help! Partnering with Members Mortgage Services
, we offer the best options to meet your home loan needs. Plus, we offer an online home loan process
in which you can get a free quote, view your loan options, check the current rates (and track them with Rate Tracker), apply for a loan 24/7, review your application status and more. You can learn more about our home loans here