3 steps to a stress-free mortgage

Have you worked hard? Budgeted wisely? Built your savings?

Time for the payoff—purchasing a home of your very own.

If you’re like many homebuyers, you’ll need to get a mortgage. Here are three steps to making the mortgage application process as stress-free as possible.

Preapproval1 is optional, but it can give you greater confidence in the amount of money you can afford to spend on a house. That can be especially helpful if you’re a first-time buyer.

Your loan officer will ask you to provide information about your current income, assets, savings, and liabilities. You’ll be asked about your work history, credit history, and ability to repay the mortgage.

In most cases, you’ll need to produce your most recent month’s worth of pay stubs, as well as W-2s and federal tax returns for the last two years. If you’re self-employed or earn commissions instead of a salary, you may need to provide extra paperwork to calculate your income.

There are a variety of mortgage programs with different interest rate structures, loan terms (length of the loan in years), and down payment requirements. The type of mortgage you choose will affect your monthly payments.

Your loan officer will help you figure out what options are best for you, depending on your plans for the home and your budget.

Even after you choose your mortgage program and sign the contract, it still takes an average of 47 days to “close” on the mortgage. Interest rates can change daily with the market during this time, so your loan officer will give you the option to either “lock in” the current rate or “float” the rate.

If you choose to float the rate, your rate may go up or down with the market until you lock in the rate. Once you’ve locked in your rate, you’ll be protected from anything that happens in the market for as long as the lock is valid.