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Types of Mortgages

Understanding the Loan Process to Finance Your Home

Applying for a mortgage can be quite intimidating - especially for a first time home buyer. With a bit of preparation, you can arrive at your lenders office with all required documentation and be well organized and ready to be evaluated to secure the financing for your home. A MABA buyer agent will assist home buyers in home financing options and facilitate how to finance a home by working with proven, professional lenders to improve the overall process for you, the home buyer. Not all lenders are the same, so leverage the experience of your MABA buyer broker to secure a solid lender.

To increase your chances for a successful mortgage approval, first evaluate your credit standing. If your credit report contains problems or errors, resolve them before applying for a mortgage. You can get one free credit report a year; do it before you apply for your loan to check for errors.

Gather the Information Needed

To finance a home requires a significant amount of information and documentation. It is recommended that you organize the information below in advance so you are prepared to apply for a home mortgage.

  • Mortgage Application: This form requires detailed information about you: your employment record, the home you want to purchase, your personal finances, etc., for each person who will be listed as a borrower.
  • Verification of Income: You will be required to provide earning statements such as W-2 forms, recent pay stubs, and tax returns for the past 2 years. If you are self-employed you will be required to provide profit and loss statements and tax returns for the current year plus the past 2 years. You will also be required to provide documentation for any additional income such as social security, child support, bonus, commissions, interest income, veteran’s benefits, etc.
  • Verification of Assets: The lender will require all bank account numbers, the address of your bank branch, and checking and savings account statements for the previous 2 to 3 months. You will be required to furnish a list of savings bonds, stocks or investments and their approximate market value. You also may be required to furnish copies of title for any motor vehicles that are paid in full.
  • Verification of Debts: The lender may request credit card statements for the past 2 or 3 billing periods, evidence of mortgage or rental payments, copies of alimony or child support agreements, verification of other debts such as car loans, furniture loans, student loans and personal or co-signed installment loans. Always provide the creditor’s address and phone numbers.
  • Property Information: A copy of the completed purchase and sale contract, as well as a copy of your canceled deposit check if you made a deposit in escrow to the seller, will also be required.
  • Origin of Down Payment: If the down payment is a gift from a relative, you will need a copy of the “gift letter” and a copy of the gift check. The gift letter is a statement from the person gifting you this money stating that it is a gift and will not have to be repaid.

Latest from the Blog

  • Massachusetts Pending Home Sales and Median Price Up Again in June

    The Massachusetts Association of Realtors® (MAR) reported today that single-family pending home sales were up over nine percent in June from last year. Pending condominium sales were also up more than 12 percent. The median price for both single-family homes and condos saw a hike, with the single-family median price rising over the $400,000 mark. Realtors® confidence both in the market and in home prices dipped slightly in June. This month’s “Hot Topic” question finds that the majority of Realtors® surveyed have had at least one transaction that was an all-cash deal (i.e. no mortgage involved) since the beginning of the year.

    June Pending Sales: 

    Single Family June 2017 June2016 % Change
    Sales 6,723 6,128 9.7%
    Median Price $410,000 $380,000 7.9%
    • Pending sales have been up 51 of the last 52 months 
    Condominium June2017 June2016 % Change
    Sales 2,596 2,307 12.5%
    Median Price $370,000 $349,900 2.9%
    • Pending sales have been up or flat 20 of the last 22 months 

    “The increase in homes put under agreement this month may be a positive sign for a spring market that has suffered plummeting inventory,” said 2017 MAR President Paul Yorkis, president of Patriot Real Estate in Medway. “However, median prices have continued to rise, which can push some buyers out of the market.”

    Realtor® Market and Price Confidence Indexes: 

    Confidence Index June2017 June2016 %Change
    Market 80.73 80.97 -0.29%
    Price 71.79 73.87 -2.82%
    • The Realtor® Market Confidence Index went down for the first time in 27 months
    • The Realtor® Price Confidence Index went down for the first time in six months
    • Measured on a 100-point scale, a score of 50 is the midpoint between a “strong” (100 points) and a “weak” (0 points) market condition  

    “The Realtor® Market Confidence Index has dipped year-over-year for the first time in over two years, indicating that Realtors® are growing concerned about some of their buyers being able to succeed in this market,” said Yorkis. “However, both indexes reveal that ultimately Realtors® remain positive. We just need to see more inventory to keep up with the demand.”

    With home inventory being as tight as it is, you want to give yourself every advantage if you are thinking of buying a home in Massachusetts. For the best possible experience, be sure to work with an agent who is a member of the Massachusetts Association of Buyer Agents.