The mortgage application process requires considerable paperwork. First, there is the application form, which asks for detailed information about you, your employment record, the house you want to purchase, etc. The lender will need documentation pertaining to your personal finances–your earnings, your monthly expenses, and your debts–to help gauge your willingness and ability to repay the mortgage.
Lenders also will examine your file at the credit bureau to learn if you pay your bills on time. A lender may reject your application if the report shows that you have a poor credit history. Thus, you may want to make sure your credit file is accurate before you apply for your mortgage. You have a right to know what information is contained in your credit report and to have someone from the credit bureau help you understand what the report says. The names of credit bureaus can be found in the phone book.
You can prepare for questions about your financial condition by using the worksheets in this below, the worksheet helps determine how much money you might have available for a monthly payment–just list all items of income and payments required on debts that will not be paid off within ten months. There is also a place for the estimated mortgage payment quoted by the lender.
|Monthly Income (before taxes)|
|$ _______||$ _______||$ _______|
|Total monthly income||$ _______|
|Monthly Payments on Existing Obligations|
|Total monthly payments||$ _______|
|Monthly Housing Expense for New Loan (ask lender)|
|Mortgage payment (principal & interest)||_______|
|Real estate taxes||_______|
|Total monthly housing expense||$ _______|