The Lending Process
- Choose a lender and prequalify for a loan
- Mortgage calculator
- The loan process in 8 steps
- Loan Documents checklist
Choose a lender and prequalify for a home
It is recommend to establish a working relationship with a lender early in the process, and getting pre-qualified prior to looking for a home. I can assist you in locating lenders. A Lender pre-qualifies you by determining what loan programs may be available to you, and suggests programs that meet your short and long term plans. You will also find out what your monthly payments and down payment will be. A letter of pre-qualification (or pre-approval) from a lender enhances your position in the eyes of the seller.In general, lenders allow your total monthly housing costs to go as high as, but not more than, 30 percent of your gross monthly income. The second requirement is that not more than 36 percent of your gross monthly income can be tied up in total monthly house payment and payments on outstanding long term debt.Lenders use slightly different formulas for arriving at “total monthly house payment”. These costs generally include your mortgage principal and interest payment, property taxes as a monthly figure, and hazard insurance as a monthly figure. These four items are referred to as PITI (principal, interest, taxes & insurance ). If you’re required to pay private mortgage insurance (PMI) because your down payment is less than 20%, those premium payments will also be included. If you decide to buy a condominium or town house, the monthly homeowner’s association fees will be included. Keep in mind, these formulas aren’t cut and dry and things change from lender to lender, so your best bet is to consult.
Get Your Financing in Order
You can get together with a lender to get your loan application, completed and the financing process started. Be prepared to provide the lender with copies of any important and necessary information.