The Loan application can be very intimidating to the new home buyer. Well, you do not have to fear this process. All the form is requiring you to do is to provide the necessary information required by law to assess whether you qualify for the mortgage loan. The only drawback is that it can be time consuming and it takes a lot of patience to gather the information that is required.

 By taking a few steps you can be on your way to owning your new home.  Before starting the process you will have to gather the required information that is required by law.  If you have been keeping your financial documents up to date, the application process can be quite easily done.  Common documents that are required are pay stubs, work history, places you have lived, banking statements, past loans and credit history, investments you have, social security numbers and other pertinent details.  The loan application will also require the property information, type of property, debt to income ratios etc.

 After your lender review this information they will determine if you are qualified financially to obtain the home mortgage loan.

 Providing that you have met the other financial requirements in the loan application the time to buy a home may be timely when the interest rate is low.  A low interest rate can allow you to pay off your mortgage loan faster than if you had a higher interest rate loan. The monthly mortgage loan payment will be lower as well. There is more to the loan application form as you shall see.

 One strategy to obtain a lower interest rate than the prevailing rate is to pay a fee to the lender. This fee is called “points” So, for a loan of $100,000 the fee would be $1,000 so the points would be 1 percent point.  The more mortgage points paid on a home loan application at the time of the mortgage funding the lower interest rate on the loan.  Other fees may include appraisal, application underwriting, credit report, origination fees, survey, title search, and other relevant fees the lender may request.

 Depending on your personal financial information and forecast for the future you may choose to get a mortgage for a short term or long term.  A short term could be 15 years while a long term may be 30 years. If you are stable in your job and your outlook financially looks promising and you intend to stay in the home for a very long time then you could take the 30 year term. However, if you plan to move elsewhere in the near term, you may want to consider the shorter term. There are other considerations to determine this choice.  Another option would be an adjustable rate mortgage. You should discuss these choices with your financial advisor or real estate professional to make a decision fitting to your circumstances.

 With the long term choice, your monthly payments would be smaller while for the shorter term you monthly payments will be higher. As you have seen, the loan application form is not as intimidating as you thought.