The first step in the loan process is to get pre-approved. Once pre-approved with a lender or broker, you can continue to work with them or choose to work with someone else.
- Choose a lender or mortgage broker.
A lender actually makes the loan. A broker acts as a go-between for a buyer and a lender. Don't hesitate to ask friends or associates for recommendations. Ask the lender or broker for references if you need more input.
- Submit your records.
A lender will ask for your financial records, including pay stubs for the last 30 days and three months of bank statements. You may also have to answer tough questions about your financial history. Be prepared: gather your financial documents ahead of time.
- Check interest rates.
Interest rates tend to fluctuate. Follow interest rate news and if rates are low, you may ask your lender to lock-in, or commit to that rate, that day. Just make sure the lock-in period includes the day you close on the house and doesn't incur extra charges.
- Choose a loan.
You may think you want a 30-year, fixed-rate mortgage, but an adjustable-rate mortgage may be more appropriate for your circumstances. Some special loan programs are geared to first-time buyers or veterans. Ask questions and shop around.