First time home buyer? A guide to meeting your mortgage broker

Mortgage

Applying for a mortgage loan — especially for the first time — can be a stressful experience. Buying a home will be one of the largest and most important financial decisions most consumers make in their lifetimes. Working with an experienced mortgage professional can help alleviate much of that stress and ensure that the loan-application process is successful.

Industry insiders recommend that you consider meeting with a mortgage broker even before you start looking for a new home to determine in advance how much money you can likely qualify to borrow. This part of the process is called “prequalification” and can save a lot of time and trouble by ensuring that you’re looking for a property comfortably within your price range.

Whatever stage of the home-buying process you are in, most mortgage professionals want you to bring certain financial documents and statements to your first meeting to get your loan application processed as quickly and smoothly as possible. If you don’t have all of the documents listed, bring as many as you have available and your broker will let you know what else is needed to complete your application.

First, your mortgage broker needs to certify your identity so be sure to bring either your driver’s license, passport or government-issued photo ID. If you already have found a home and have a purchase contract, be sure to bring that with you to the first meeting, too.

The financial documents most brokers want to see at a first meeting include copies of your two most recent pay stubs, copies of your federal tax returns with all schedules for the last two years and copies of your W-2 forms for the last two years. If you are a first-time homebuyer, plan on bringing the last three years of any income and tax records.

If you are self-employed or own your own business, your mortgage professional will need copies of your federal tax returns with all schedules for the last two years as well as a year-to-date profit and loss statement for your business. If your firm is an incorporated entity, bring a copy of corporate tax returns for the last two years. If you are a limited partner bring a copy of your K-1 filings for the last two years. And if you’re a general partner in a firm, bring your 1065s and K-1 filings for the last two years.

Members of the U.S. military or veterans should bring a statement of service if currently on active duty as well as authorization to live off base (if applicable). If you have been discharged, bring your certificate of release or discharge from active duty and bring DD Form 214, generally referred to as DD 214.

Your mortgage professional will also want to see all of your bank statements going back two or three months for each financial institution in which you maintain checking and/or savings accounts. Also bring copies of current statements for all individual retirement accounts, 401(k), stocks, bonds and any other retirement or investment accounts in your name. Your mortgage broker may also want to see your credit card bills for the past few billing periods and information on any other consumer debt you carry such as car loans or lease agreements.

If you are currently renting your home, bring your lease agreement going back 12 months (three years for first-time time buyers). If you are paying off student loans, bring copies of any student loan deferment letters/agreements. And if you were in a bankruptcy proceeding discharged in the last seven years, bring that paperwork, too.

Be sure to take your time and carefully fill out the application as completely and accurately as possible. Not disclosing any credit or financial problems upfront or holding back requested documents from your mortgage professional could delay the process and potentially prevent your loan application from being approved.

Finally, industry insiders and experts recommend bringing an open mind when you meet with a mortgage professional for the first time. For instance, you may be considering paying a 10% deposit on the price of your new home instead of the more standard 20% so that you have more cash and savings on hand when you move in. But anything less than a 20% down payment will likely cause the lender to require you to take out a private mortgage insurance policy, also known as PMI, for a certain period of time.


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