How to Buy a Home

Getting a Loan

Here is a checklist detailing the financial information you’ll need to compile:

• Two years of W-2s, or personal tax returns for self-employed buyers
• 12 months' rent receipts or canceled checks
• verification of income (including alimony or non-wage income if applicable)
• Last 3 monthly bank statements
• A complete list of creditors and debts
• A detail of assets such as cars, furniture and personal property and other items that clarify their individual credit picture.
• When pre-qualifying for a loan, do not obligate yourself to a particular lender.
• Check out potential down payment grants as well as special programs that can eliminate closing costs or mortgage insurance premiums
• Never pay a finder’s fee or an origination fee up front.
• Make sure fees are payable only when a loan is closed under the terms and conditions in the "Good Faith Estimate"
• That "Good Faith Estimate" should be given to you within three days after you complete your loan application. It will disclose all of the finance charges involved in your loan.
• There is a big difference between a "no cost" loan and a "no up-front cost" loan. In a so-called "no cost" loan, all expenses are paid out of the commission paid to the mortgage broker by the loan wholesaler. They not added to the loan balance or paid by you at closing. In a "no up-front cost" loan, there can be numerous fees and expenses built into the loan balance.
• When applying for a loan pay only for your credit report and appraisal up front. All other charges should be paid at closing.
• Avoid junk fees. Lenders make money on origination fees paid by you or by the loan wholesaler. All other fees can be negotiated or eliminated altogether. They include: application fees, document preparation fees, processing fees, underwriting fees and other such fees.
• Never buy credit life and disability insurance from your lender. It is almost always a better deal to buy a separate term life insurance policy to cover all of your financial obligations.
• Never allow a lender to "bend the rules" to get you a loan as in lying about your income, etc..
• Never agree to pre-payment penalties.
• Make sure all terms and conditions are in writing.