Collect paperwork and documents. Buyers should have paycheck stubs, W-2 forms, tax returns, and bank and investment statements for the last two years.
Check credit reports. Buyers should know their
current credit score before applying for a loan. Credit reporting
agencies are required to give one free report annually.
Keep tabs on spending habits. For example, maxing out
credit cards or falling behind on other loan payments will likely
create issues when applying for a mortgage. Buyers should avoid going on
a spending spree before and after applying for a loan to avoid any
Explore options. ICBA encourages buyers to work with
community bankers to figure out how much to borrow and which mortgage
product is right for them. They should explore mortgage options,
including rate adjustments, fees, and other loan features, to avoid
surprises at closing.
Know the rates. “Learn what current mortgage rates
are,” ICBA notes. “Your community banker can help you understand how
that translates into monthly mortgage payments.”
Look for special programs. Buyers may want to check
with their state, city, and county government agencies for special
first-time home buyer loan or grant programs available to assist with
down payments and closing costs.