WHAT IS A MORTGAGE LOAN?
A mortgage loan is money given to you by a financial institution to buy a house. It requires a contractual agreement that you'll pay back the loan with interest in specified monthly payments over a stated period of time. You can choose your payment term - the longer the term, the lower the monthly payment, but you'll pay more in total interest.

WHERE DO I BEGIN?
Your financial institution has a mortgage loan officer who can answer your questions, help you select the best financing for your needs, prepare estimates of your closing costs and down payment, calculate payment schedules, and help you determine what price home you can afford.

HOW DO I PREPARE TO APPLY FOR A MORTGAGE LOAN?
Getting a mortgage loan is a big step so you'll need to understand exactly what is involved. Make a list of any questions you have about the loan. Know the terms on the back of this guide so you'll be familiar with them when you meet with your loan officer.

HOW MUCH HOME CAN I AFFORD?
Generally, lenders want your monthly payment, including taxes and insurance, to be 28% of your gross monthly income. Your loan officer can help you determine what price home to shop for by reviewing your income, debts and credit. You can also apply for a pre-approval where the lender approves the loan for 90 days before you find a new home. Pre-approval makes your offer more attractive to a seller.

HOW DO I APPLY FOR A MORTGAGE LOAN?
When you have found a home, your loan officer will help you fill out a loan application and will tell you what information you'll need to furnish. The most common items required are listed under information needed for your loan application.

WHAT HAPPENS AFTER I APPLY FOR A MORTGAGE LOAN?
After you have applied for a loan, the information you have supplied will be verified and a credit report on you completed. An appraisal will be performed on the home you are purchasing to determine its market value. When all the information is collected, it will be reviewed for loan approval.

WHAT SHOULD I KNOW ABOUT CLOSING COSTS?
Closing costs are up-front fees you pay the lender when taking out a mortgage loan. These may include points. Points are a one-time charge you pay the lender to buy a lower interest rate than the current one. Each point equals 1% of the amount you are borrowing (i.e., if you borrow $90,000, one point costs you $900). Be sure to ask how many points you'll be charged because you must be pay them at closing.