Initial Steps to Acquiring a Mortgage Loan

Purchasing a home outright is a common transaction. There may be an uptick in renting instead of buying in larger cities, but home-ownership may be a better deal for the average person living and working in our communities.

If owning a home is your dream, it is best to be prepared before you buy. You will need to gather a certain amount of information and get yourself prequalified.

Real Estate agents prefer to work with prospective buyers with a pre-qualification. Your NexTier lender can help by getting you prequalified in a fast and easy manner! Keep in mind, a pre-qualification is not an official mortgage application or approval, but you will need to provide all sources of income, assets, and personal information.

Pre-qualification Checklist

• Income information: things to bring include your last two pay stubs, two years of tax returns, W-2s for previous two years, and documents showing additional income (overtime, commissions, bonuses, or self-employed income).
• Asset information: you’ll need to provide information about your assets, the items of value that can be converted to cash. You should bring (if applicable) bank account statements, investment information, and documentation for any gifts of money from family or friends.
• Personal information: you’ll need a valid form of identification (driver’s license or passport) and your social security card.

A pre-qualification is meant as a guide to help the real estate agent determine what the buyer can afford. Prior to purchasing the home, your mortgage lender will need to complete a thorough analysis of your financials.

Once your pre-qualification is set, let the home shopping begin!

It’s important to note, lenders do not take into consideration additional costs when telling buyers how much they can ‘afford’. Before buying the maximum amount that you prequalify for, consider the cost of things like daycare, utilities, medical bills, home maintenance, taxes, insurance, appliances, and furnishings.

For example, if you spend all $400,000 on the home and can’t afford to buy garbage cans or pay the bills, that isn’t in your best interest.

At NexTier Bank, loan officers educate borrowers about these additional costs. “It’s not always in the best interest of NexTier Bank to lend a borrower the maximum amount of money they can afford,” Mark A. Kappeler, Vice President of Retail Lending at NexTier Bank said.

Now That You’ve Found Your Dream Home:

• After you find the home of your dreams, you’ll then contact your loan officer and make an official mortgage application.
• For an official application, you will need to submit (if you haven’t already):
  • Identification (driver’s license or passport)
  • Social security card
  • Two most recent pay stubs
  • Two years’ worth of W-2s
  • Two years of tax returns
  • The last two months of any checking or savings account
  • Your last two statements of any type of retirement or investment accounts you might have
  • A copy of the sales agreement
  • If you’re self-employed, you’ll need two years of personal and business tax returns

Once everything has been submitted, your loan officer will begin the underwriting process. During this process, the underwriter will review your financial information (income and debt) for accuracy. They will evaluate your credit history, assets, and loan size to anticipate the likeliness of repayment. The lender will order an appraisal of your prospective home. Any inspections (whether elected or required) are completed. A title search for existing property liens is completed.

On average, the entire mortgage underwriting process may take as little as 30 days. But, depending on the lender and circumstances, the mortgage underwriting process can take longer, often around 45 to 60 days.

If everything checks out, your home will move to closing. Your realtor will schedule a time for you to sign all official paperwork and receive the key to your new home!

Learn more about NexTier Mortgage Options.

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