Mortgages 101: How to choose a lender, and apply for a Mortgage

Q.

How do I find a lender? A.

Shop ‘till you drop. Or, at least until you find the best price. Just like anything else, you always want a great deal and the best opportunity possible, so make sure to check in with every avenue which includes mortgage brokers, banks, and various state government lenders.

If you take the time to analyze numbers and compare, it can really end up saving a substantial amount in the long run. Your lender will be a part of your entire home-purchasing process; so aside from getting a “great deal,” it’s important to feel comfortable and confident with them. Q.

What does my mortgage cover? A.

You may have heard the term PITI, which is: principal, interest, taxes and insurance; and what you pay on a monthly basis.

Your principal is the amount you actually borrowed.

Your interest is the payment to the lender for the amount that you borrowed.

Taxes are covered in your mortgage, which are divided out through your annual mortgage payments (which makes things easier for you at the end of the year).

And lastly, your mort- gage covers your insurance, which can prevent you from the unexpected such as environmental elements, natural disasters and theft. Q.

What do I need to apply for a mortgage? A.

When applying for a mortgage, you’ve got to show what you’ve got. Literally.

Aside from your social security number, be prepared to have copies of your checking and savings statements for the past six months; a list of credit card accounts with balances owed; a list of loans such as car payments, financial aid, etc.; statements of assets such as stocks and bonds; recent paycheck stubs; copies of your two last years’ income statements; and contact information for current employment verification.