The first step to take in acquiring a new home loan is to fill out a loan application, sometimes referred to as a 1003. With a completed loan application and a credit report your loan agent can begin the process of searching for the right loan product for you. Some of the important factors that will be examined include:

• The loan to value ratio or LTV
• The debt to income ratio or DTI
• The loan amount, LA
• Your credit scores
• The purpose for the loan, i.e. purchase, refinance or cash-out refinance

After determining which loan product is the best fit, there is a period of time where you, the loan agent and the title company will gather all the documentation the lender will require. Among the important items will be:
• Income verification – typically supported by 2 years of income taxes and returns and w2’s
• Asset verification – supported by 2 months of complete statements on all accounts
• Property value – an appraisal is ordered
• Property has clear title– a preliminary title report is prepared by the title company
• Borrower has been disclosed properly

At that point a final approval from the lender is requested and when received loan documents can be ordered and signed. At some point in the process the borrower has to decide to lock a rate. Locking a rate means asking the lender to guarantee the interest rate for some period of time, typically 30 days, while the loan process is moving forward. Until a loan is locked the borrower is subject to market adjustments. Talk to your loan agent about recommendations regarding locking.