Applying for a loan

Many people believe that applying for a loan is one of the most distressing parts of buying a home, but it doesn't have to be. I have a close relationship with some lenders in the Cumberland area, and they've helped me understand some things that make the loan application process effortless.

1 – Compile a list of questions about your loan program

If you find that you don't fully comprehend the advantages and disadvantages of the various programs, be sure you bring a list of questions with you. I or one of my lender contacts will be able to help you understand the advantages and disadvantages of both programs, because it's hard to know the characteristics of fixed and adjustable rate mortgages.

2 – Decide when you want to lock

By locking in the rate, your mortgage lender is committing to the interest rates for the loan – normally at the time the loan application is submitted. By floating the rate, you can lock the rate at any time between application and issuance of closing documents. Those who elect to float presume interest rates will drop in the near future. Click here to see the outlook for the next 90 days of interest rates.

3 – Determine if you want to pay additional points to decrease your interest rate

If you elect to pay additional points to lower the interest rate of your mortgage loan, you will do so by paying for them in cash at closing. Every point is 1 percent of the mortgage loan. If you're unsure if buying points is the best option for you, click here to use our points calculator.

4 – Bring your paperwork

Acquiring a mortgage loan requires a lot of paperwork, so you should take some time to get your documents together. Click here for a list of common loan documentation.

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