If you’ve finally found the perfect home you want to buy, the next step will be to apply for a mortgage loan online.
How to Apply for a Mortgage Loan Online in 9 Simple Steps
Thankfully, if you have good credit and sufficient income, this step should be easy to complete if you know what you’re doing.
This article will go over all of the steps involved in applying for a mortgage loan online so that by the time you finish reading it, you’ll be ready to apply for one yourself!
1) Prepare all documents
Apply for a Mortgage Loan Online is an easy process, but it will take some time. Be sure you have the following documents before you apply:
-Social Security Number
-Driver’s License -Birth Certificate or Passport
-Bank Statement or Tax Return (last three months) -Credit History Report
-Wage Statement (last two months)
-Statement of Assets and Liabilities (bank statement with all account numbers from all bank accounts including 401(k), retirement accounts, and savings account).
-The more detailed your application can be, the more competitive you’ll be for your mortgage loan.
2) Research online, then call your mortgage loan broker
There are many benefits to applying for a mortgage loan online. For starters, it can save you time and hassle.
You’ll have the convenience of completing all of the application requirements at your own pace and on your own schedule.
With fewer questions to answer and less paperwork, you’ll find that applying for a mortgage loan online is much easier than going through the process in person.
Plus, if you qualify for an online rate quote, then you’re more likely to get approved because there’s no need for an appraisal or home visit.
A lot of people are nervous about how easy it is to apply for a mortgage loan online – but don’t be! In fact, it can take as little as eight simple steps:
1) research;
2) compare interest rates;
3) fill out an application form;
4) sign the legal documents;
5) verify employment history and income;
6) upload necessary documentation such as tax returns and bank statements;
7) agree to pay monthly fees for closing costs and other expenses incurred during the mortgage loan process;
8) provide final authorization.
3) Create an account on your lender’s website
Before you can apply for a mortgage loan online, you’ll need to establish an account with your lender.
You can usually do this by filling out the necessary information on the lender’s website. For example, first, enter your name and email address, then create a password and fill out any other fields required of you.
Once done, click submit or create my account and you’re all set!
#1: Gather Your Information
Once you’ve established an account with your lender, it’s time to gather the necessary documents needed to complete the application process.
4) Add your personal details and financial information
You are not required to have a financial institution account or credit score. You will need bank statements, pay stubs, and tax returns.
Your income should be at least 2x the amount of your monthly mortgage payment. Your down payment needs to be less than 20% of the purchase price.
You can apply for loans with a maximum loan-to-value ratio of 97%. For example, if you are buying an $800,000 home with only 10% down ($80,000), your loan-to-value would be $720,000 which is within the maximum limit.
If you’re looking for an FHA loan (minimum 3.5% down), it has stricter requirements including having a clean credit history, a low debt-to-income ratio, and a stable job/income.
They also want evidence of liquid assets (cash on hand) so that when the property appraises for less than what’s owed on it, there’s enough cash to make up the difference.
To qualify for VA loans (0% down payment) your veteran status must be verified and provide a copy of either their DD214 (if discharged from military duty) or certification form SF180B (if they received disability benefits).
You’ll also need proof of good credit.
5) Lender underwriting process
The underwriting process is the process of determining how likely it is that you’ll be able to repay your loan and how much risk the lender will take on.
This can vary based on where you live, the type of loan, or the amount you’re applying for, but here’s an overview:
1) Application Review – The bank reviews your application. They may require more information such as tax returns or pay stubs.
2) Credit Report Review – If they need more information, they may also order your credit report from one of the credit bureaus (Equifax, TransUnion).
This will include any outstanding loans and debts you have with other lenders. Your credit score will determine how risky you are as a borrower.
Higher scores mean lower risk for the lender.
3) Income Verification – A lender may ask for W-2s or 1099’s so that they can verify your income.
4) Bank Statement Review – Checking account history, savings account history, and past records of monthly payments are reviewed by the bank so that they can calculate how much money you make each month.
6) Application tracking tool
Applying for your mortgage loan online can be done in 9 easy steps. It’s important you are organized and prepared before starting the application process so that you can avoid any hiccups or delays.
1. Fill out an application with basic information like name, email address, and phone number.
2. Upload your income documentation (pay stubs, tax returns) and bank statements (checking account balances).
3. Provide documents to prove your employment history (last three months of pay stubs).
4. Submit photos of your identification documents (driver’s license, passport, etc.).
5. Sign the electronic signature on each page indicating that everything submitted is accurate and correct.
7) Submit and sign documents online
The first step is to submit and sign the documents online. After you submit your paperwork, you’ll receive an email with a link to review and sign the documents electronically.
You can also choose between signing electronically or mailing back the signed documents by post.
Next, you’ll need to provide some personal information such as your name, address, and contact details.
You’ll also need to enter some additional information about yourself including your work status, annual income, monthly expenses, and how much money you would like to borrow.
This will be used when calculating how much mortgage loan you can afford.
Finally, you’ll be asked if you want your credit file checked before making an offer on a property as well as whether or not you want help finding a property that suits your needs.
8) Request Mortgage preapproval
Requesting mortgage preapproval is the first step you should take when applying for a mortgage loan.
Your lender will then be able to offer you an interest rate and terms that are based on your financial situation.
9) How you can apply for a mortgage loan online
1) Choose your type of home
2) Select your location
3) Choose your down payment amount
4) Provide income documentation (if required by the lender)
5) Decide whether or not you have any other debts
6) Review and sign the application and add any additional documents requested by the lender (if applicable).
You can submit these electronically or via mail. If mailing, make sure they’re sent certified mail with the return receipt requested, so you have proof of delivery.
