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Apply For Your Mortgage Loan

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Apply For Your Mortgage Loan

Once you have found a home (and the seller has accepted your offer) that fits your personal preferences, your needs and your budget, it's time to apply for your loan. Get in touch with your lender and they can take your application. You can apply for a mortgage by filling out an application in person, and depending on your lender, may be able to start over the telephone, or online. You'll fill out an application, providing information on behalf of yourself and anyone else who is going to be listed as a co­borrower on the mortgage (like a spouse or partner.)

To apply for a home mortgage, you'll need to provide your lender with documentation to help verify your employment history, creditworthiness, and overall financial situation. If you are applying with someone else, they will also need to provide the same documents. Be prepared to provide the following: W­2s (past two years), recent pay stubs (two most recent consecutive), bank statements for all financial accounts, including investments (for the last two months, all pages), signed personal and business tax returns (all pages and relevant schedules), if self ­employed ­ a copy of most recent quarterly or year-­to­date profit/loss statement and a copy of the signed purchase agreement for the property you are buying.

Loan Commitment

Mortgage loan approval is also known as loan commitment. The offer to purchase includes a mortgage contingency which simply states that if despite your best efforts, you cannot obtain financing by a certain date (mortgage commitment date) your deposit must be refunded to you in full and you are out of the deal. The lender's decision is based not only on your financial ability but also depends on the value of the property you are buying. That value is determined by a licensed appraiser assigned by the lender. For more detailed information about financing I would have you contact one of our preferred lenders. 

Title Search & Title Insurance

Purchasing your home is an important decision. But how does one know that the property they purchased has a clear title? Because unknown problems can be hidden in the history of a property's title, homeowners pay a title insurance company for title insurance. Title insurance is an insurance policy that guarantees the property title is free from the problems of hidden liens and claims. The title insurance company searches public records for the property to make sure there are no problems in the title's ownership and history. The fee for title insurance is usually included in the itemization of closing costs from the lender and is a one­time fee. By searching the history of the property's title, the title insurance company can assure the new owner of clear ownership to their new property and that no outstanding debts or unknown ownership issues are associated with their new home. 

In addition, besides securing a good search on a property's title, the title insurance company will insure the property owner as long as he/she owns the property. Therefore, if a problem arises at a later date, the title insurance policy will cover legal fees in defense of a claim against the property that is covered under the title policy.

Homeowner's Insurance

Before finalizing a mortgage loan, lenders require homebuyers to purchase at least a minimal level of "hazard insurance," which is part of the standard homeowners' insurance policy. Hazard insurance will cover unintentional damage or destruction by fire, smoke, wind, hail, theft, vandalism, or another similar event. To protect your own interests, however, you'll probably want to buy comprehensive homeowners' insurance, including liability insurance and more complete hazard coverage than your lender requires.

In the case of condominium purchases, the condominium association maintains what is known as a master insurance policy on the entire property which covers all condominium owners for any common expenses incurred in case of fire or other accidents. Your mortgage company will request proof of this policy as a condition of loan approval. This policy does not necessarily cover individual units. If you purchase a condominium, you may also want to obtain separate homeowner's insurance, specifically contents insurance to cover you for theft or other loss concerning your condominium unit itself or personal property in it.
Shirley Mueller
Shirley Mueller
Realtor®