What is the Process for Applying for a Mortgage Loan as a U.S. Resident?

The first step to acquiring a property with a mortgage loan is prequalification. There are several government-approved programs for those looking to obtain a loan, such as FHA, Conventional, and VA.

FHA or first-time homebuyer loans have the advantage of only requiring a 3.5% down payment and a credit score of at least 580, but they have the disadvantage that only single-family homes and most townhomes with Lot/Lot description qualify. block.

Conventional loans require a 5% down payment and a minimum credit score of 620.

VA loans for war veterans have no down payment requirements, you only need to show the Certificate of Eligibility and the DD214 or discharge document from military service.

The basic requirements to qualify for a loan are:

• Personal identification (driver’s license)
• Social Security number
• Last 2 bank statements and last 2 years of complete personal tax return
• For employees who receive a fixed salary, they must present W2s for the last two years and proof of payments for the last two months.
• For self-employed workers or business owners, you must submit 1099s for the last two years and business tax returns for the last two years.

Some important information:

• Interest rates for local loans start from 3.68%
• The closing costs involved in financing range between 5% to 6% of the value of the property.
• After a bankruptcy filing, the waiting time is 2 years for FHA and VA loans and 4 years for Conventional.

What to do before applying for a loan?

1. Get your credit report BEFORE you apply for the loan so you have time to correct any errors or problems in your history.
2. Be clear about how much you can put down (including closing costs)
3. Shop for the best interest rate BUT take into account the other terms of the loan.
4. Compare quotes
5. Request a “good faith estimate”

What NOT to do before applying for a loan?

1. Make “larger” purchases through credit
2. Do not move important money from accounts.
3. Apply for any type of loan (car, boat, credit cards, etc.)
4. Change your main place of residence
5. Open or close bank accounts

What would be my monthly payment responsibilities?

Most American mortgages are payable each month and your local bank can arrange to make payment through them directly. Property taxes and insurance premiums are collected monthly by the lender and paid by the lender annually. Generally your bank will deduct monthly:

• Mortgage
• Insurance (flood, accident, hurricanes)
• Third party insurance (optional)
• Property tax (property taxes)

For your part, if there is a condominium association or board, you will be responsible for directly paying the monthly maintenance cost.

*Approval is subject to the financing and credit policy of the financial institution