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Talk to Your Lender

When you apply for a loan, look for a lender who is willing to take time with you. Be upfront that you’re a first-time buyer and that you want to understand the process better. If you don’t know a good lender, ask for referrals from people you know who have recently purchased a home. 

The lender you choose will require the answers to certain questions and for you to provide specific documents. This is to make certain you’re put into the correct loan product, FHA, VA, Conventional, or other. In order to do that, share your plans and dreams. If you want to flip the home in two years, say so. If you want to live in it for 10 years, say so. It could make a difference in the type and cost of the loan your lender recommends. 

Be willing to provide basic information your lender needs – income, debts and obligations such as child support or student loan. Come clean about any problems you think you may have getting a loan such as problems with your credit scores. Your lender will know how to help you raise your scores.  

You may have to wait a month or two for your credit scores to reflect your improved credit history. Be flexible about your goals and don’t try to get a loan that’s beyond your means. You’ll build equity and wealth much more quickly if you buy a home you can comfortably afford. 

The lender will ask you basic questions:

  1. What is the selling price and address of the home you’ve chosen? Provide a copy of the signed purchase agreement, if applicable. 
  2. How much money are you planning to use as a down-payment?
  3. Where does the down-payment originate? Is it from savings, a gift, or a loan? 
  4. How long do you plan to occupy your new home? The lender will show you appropriate loan products with various terms, including 30-year or 15-year fixed rates, adjustable rates or a hybrid of the two.  
  5. What is your anticipated closing date? 

In addition, all lenders will require the following documentation: 

  • Your Social Security number, to run your credit scores.
  • Your address and contact information for your employer of the past two years. 
  • W-2s for the past two years and current paycheck stubs.
  • Bank and savings information, including printed bank statements for the past six months.
  • Revolving debt and loan accounts, and monthly obligations such as child support. 
  • Personal assets such as a stock portfolio, CDs, other property, and 401Ks. 
  • Certificate of Eligibility and DD-214 (for veterans only).
  • Tax returns with 1099s for the past two years and current balance sheet for self-employed applicants.

Once you apply for a loan, your lender will run your credit. They will contact one or more of the three credit reporting bureaus to get your credit report and your credit score. If all goes smoothly, they’ll give you recommended loan products from which to choose. Once you make a selection, it will take about 30 to 45 days for the loan to close.