Tips For Buying a Home Minneapolis MN: Applications and Processing
Mortgage Brokers and Lenders – Who Does What?
If you’ve been looking at buying a home Minneapolis MN, you may be wondering about the difference between a mortgage broker and a mortgage lender. The mortgage broker is the person or company who is your main contact throughout your loan. They are often able to work with a number of lenders, who actually provide the funds for the loan. Typically, the lender pays the mortgage broker a fee for acting as the intermediary and providing all the customer service.
Filling Out the Application
There are standard forms to be completed when applying for a loan. Some mortgage brokers keep these on their website so you can fill out and submit the forms on line. The information will be verified and used to qualify you for your loan, so take the time to answer questions accurately.
Documentation
When applying for buying a home Minneapolis MN, the mortgage broker will need copies of the documents you began gathering in the first phase of the loan process, including:
- Either 2 years of W-2 forms from your employer or 2 years of tax returns if you are self-employed
- Recent pay stubs
- 3 months bank and money market statements
- Brokerage, mutual fund and retirement account statements
- Proof of other income sources (alimony, trusts, rental income, etc.)
- Credit card statements
- Auto /boat / student / miscellaneous loans
- Drivers’ license or form of ID
- If you’re not a US citizen, then copy of your green card or visa
- Copy of any existing mortgage debts if you are applying for a home equity line of credit or another mortgage
Stay in Communication
The lender will have an analyst, usually called an “underwriter”, crunch your numbers and verify your documentation to confirm your ability to repay the loan. Once you are in contract on a property, there may also be a loan approval committee which will meet to review the underwriters’ conclusions regarding your creditworthiness, and to evaluate the property on which they are lending. This is called the underwriting process, and questions are bound to arise. Be sure to return your mortgage broker’s calls promptly to keep the process moving forward smoothly. Check in with your broker periodically.
FAQ | Buying a Home Minneapolis MN
What should I do before applying for a home loan?
Before applying, check your credit score, gather financial documents, and avoid making big purchases. Being prepared can help you get approved faster.
What documents do I need for a mortgage application?
Lenders usually need your pay stubs, tax returns, bank statements, and credit report. If you’re self-employed, you may need extra documents like business tax returns.
How can I improve my chances of getting approved for a home loan?
Pay off debts, save for a down payment, and keep your credit score high. Lenders like to see stable income and low debt.
Should I get pre-approved before house shopping?
Yes! A pre-approval tells you how much you can afford and makes you a stronger buyer when making an offer.
How much money do I need for a down payment?
When buying a home Minneapolis MN, the amount of money you need for a down payment depends on the loan type. Some loans require as little as 3% down, while others may need 20% or more.
What are closing costs, and how much should I expect to pay?
Closing costs are fees for things like appraisals, inspections, and loan processing. They usually range from 2% to 5% of the home price.
How do I get help for a down payment on my home?
There are programs for first-time homebuyers and low-income buyers that offer grants or low-interest loans to help with the down payment.
What’s the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate of how much you can borrow, while pre-approval is a more detailed check by a lender, showing sellers you’re a serious buyer.
Should I shop around for a mortgage lender?
Yes! Different lenders offer different interest rates and fees. Comparing options can save you thousands over the life of your loan.
How can Molina Realtors help with financing a home?
We work with trusted lenders to find the best mortgage for you. Whether you’re buying a home Minneapolis MN, a first-time homebuyer, or need help with paperwork, we’re here to guide you!