How to Prepare for Your First Lender Meeting

Applying for a mortgage can be a time-consuming and tedious process. And because we’re talking about a large sum of money, there will likely be some tough, personal financial questions.

If you’re new to the home buying process, that first mortgage appointment can have you a bit on edge. But, it doesn’t have to be scary. Most buyers find that the better prepared they are, the smoother and faster everything goes.

Here are a few tips to get you ready for that initial lender meet-up.

Have a list of questions
Throughout this process, you’ll be required to hand over a lot of information to your lender. But, it’s also important for you to get all the information you need to make the best financial decision. Start by putting together a list of questions for your lender. There are several resources online, but some of the important ones to include are

• What types of mortgages do you offer?
• Which program is best for me and why?
• Do you work with any down payment assistance programs I might qualify for?
• What is the interest rate and the annual percentage rate?
• How much of a down payment is required?
• What are all the costs?
• Will I have to pay mortgage insurance?
• What is a mortgage rate lock and is it for me?
• How long will it take to close?

Understand the pre-approval/pre-qualification difference
Ron Eible, originating branch manager with CrossCountry Mortgage, LLC, says “the home buying process doesn’t start when you find a house...it should start weeks or months before.”

And if you’re serious about buying a home, that process starts with a pre-approval, which is different from a pre-qualification. A pre-qualification is based on data you submit to a lender, and it provides a quick, ballpark estimate of how much you may be able to borrow. However, this amount is not a sure thing because the information has not been verified.

Getting pre-approved is a more involved process. You’ll need to complete an official mortgage application and supply the lender with the necessary documentation in order for them to perform an extensive check on your financial background and credit history. Only after reviewing your complete financial picture will the lender be able to pre-approve you for a specified amount.

Have a budget in mind
While you may be pre-approved for a certain amount, it doesn’t necessarily mean that’s what you should spend. Before your meeting, put together a household budget. Your lender can review it with you and he/she may even add line items you did not consider.

And remember, when it comes to mortgages, lenders are looking at gross income, not what you actually take-home. When putting together a budget, start with that take-home pay number, and then list all recurring monthly expenses. Don’t forget to factor in your current lifestyle expenses, like eating out or traveling. If you don’t want to give up those luxuries, they need to be considered.

Start compiling your paperwork
As mentioned, a big part of the pre-approval process is documentation, and Eible says gathering this information is one of the best ways to prepare for your lender meeting.

“Typically, lenders group documentation into two months or two years,” he said. “For instance, we like to see two years of W2s and federal tax returns, and two months of bank statements, pay stubs, etc.”

You’ll also need two months of retirement and investment account statements, a list of your debt obligations, residential history for the past two years, and identification, including a driver's license and social security card.

But Eible reminds us that each borrower is different and, depending on your financial situation, more paperwork may be required.

“If you’re self-employed, if you own other real estate, if you have other sources of income, including child support, we’ll need to see additional documentation,” he said. “If you’re unsure of what you’ll need, give your lender a call before the meeting so you know what is expected.”

Eible says the documentation part is really important because it’s often what holds up the pre-approval process.

“It’s a joint effort between the lender and the customer,” he said. “But the customer does have some control over how long it takes. Gathering as much documentation as possible beforehand is great, but once everything goes to underwriting, there may be more information requested. It’s important that you’re able to respond quickly to keep things moving along.”

That means good communication between you and the lender is paramount, and that’s why working with a local lender is so important

“There may be issues that pop up along the way, and you’ll undoubtedly have questions come up, so make sure you’re working with a lender you trust and feel comfortable with,” said Eible. “A strong relationship between the lender, REALTOR^®, and client is really the best way to ensure a successful home buying experience.”

For a list of local lenders and REALTORS^®, visit the Greater Lansing Association of REALTORS^® website at www.lansing-realestate.com.