Delmar Mortgage

Steps To Find
The Right Mortgage Lender

Resources & Guides

You Will Learn: Overall, what’s important in finding the best mortgage lender
Step-by-Step instructions to find a mortgage lender: what to do first
What information you need to find a mortgage lender with an optimum interest rate home loan
All about the numbers: mortgage lenders, interest rates, down payments, monthly payments, closing costs

Overall: Finding the right mortgage lender for you in the homebuying process can be an overwhelming experience. But if you’re fully prepared and know what the mortgage lender needs to get your mortgage started, that’s half the battle. Before shopping for a house, it’s a good idea to know how much you can afford with an interest rate and mortgage payment that’s right for you.

    Step-by Step Instructions To Find The Best Mortgage Lender

    Choosing a mortgage lender can be managed if you break down the mortgage process into small steps. Prior to approaching any lender, answer the following questions:

    1. What’s your credit score?

    Good or bad, run a credit report on yourself to make sure you can qualify with a higher credit score. Large credit card balances, student loans and a credit history of not paying your bills may lower your credit score and limit your ability to qualify for the best mortgage loan. Don’t cancel any credit cards though, keep them open. But don’t open any new credit card accounts either. This should help you decide if you’re “mortgage-ready” with a good credit score and can afford the purchase price of your new home.

    2. What kind of mortgage do you want?

    Determine the type of mortgage loan you might qualify for and your mortgage options:

    • First time Home Buyer Loan—conventional loan
    • FHA Loan—backed by Federal Housing Administration
    • VA Loan—Department of Veterans Affairs for veterans and active-duty service members
    • Conventional fixed rate or adjustable-rate mortgage loans

    3. How much home loan can you handle?

    Use an online mortgage calculator to find the right monthly payment for you. Know your down payment, monthly mortgage payments, closing costs (including home appraisal) insurance premium and property taxes.

    4. How much can you afford for an upfront down payment?

    Most lender underwriters require at least a five percent down payment. Be prepared to document the source of a down payment. If your down payment is less than 20 percent of the total mortgage, you may need to pay PMI (Private Mortgage Insurance) for a while. And remember to include closing costs in your estimate.

    5. What’s my budget?

    Once you know your credit situation, credit score and the mortgage loan amount you can afford, see if the monthly payments fit into your budget.

    Once you answer these questions, and document your financial history, you’ll be able to select several mortgage lenders with favorable interest rates.

    You’ll need to document
    your financial history to your lender.

    Be prepared to share your personal and financial past with your selected mortgage lender. That includes:

    • Your identity: driver’s license, social security card
    • Prove your employment history and monthly income with one or two years pay stubs
    • Other income sources need to be documented including self-employment
    • Tax returns, W-2s, 1099s
    • Assets–including bank statements, checking account statements, savings accounts, IRAs, 401Ks, brokerage account statements
    • Debts–monthly debt payments including credit cards, student loans, proof of child support payments and car loan statements
    • Rental agreements, proof of payment and contact information of landlord

    Collect these documents in one place before you apply for a home loan.

    All About The Numbers.
    The better they are, the better your mortgage interest rate

    Have these numbers ready when you’re shopping for a mortgage lender and you’ll be much more eligible for a mortgage pre-approval with an interest rate you can live with:

    • Your credit score based on your credit report
    • Your assets and debts
    • Your debt-to-income ratio
    • Down payment amount
    • Closing costs
    • Homeowner’s insurance and property taxes
    • Your budget
    • Interest rate

    Applying for a mortgage home loan with the best interest rate is one of life’s most important experiences. Not knowing what to expect can be scary, but if you know what to do, when to do it and what’s the best path for you, you’ll make the home buying process easier and secure your future and your family’s potential for years to come.

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