New Jersey Home Mortgage Process

Applying for a New Jersey home mortgage loan is a straight forward process if you know what to expect. 

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Just spending some time preparing the necessary documents and understanding how the process works will save a significant amount of time and hassle.

This article will explain all of the steps involved in the process, as well as some other tips for applying.

1) Gather all of the important documents

The first step in getting ready to apply for a New Jersey home mortgage is to gather all of the important documents. 

If you work for a company, it is a good idea to have at least two years W-2 statements and one month of pay stubs.

On the flip side, if you are self-employed, you will need to provide two years of tax returns and a YTD profit and loss statement.

In the case of rental property ownership, you will also need to have copies of the rental agreements along with the two years of tax returns.

Bringing along a copy of your divorce decree is a good idea if applicable.

If you really want to speed up the process of getting approved, you should have recent records of stocks, mutual fund accounts, and bank statements going back three months.

It is also a good idea to have documentation on your IRA or 401K accounts. 

Non U.S. citizens who wish to purchase a home need the above mentioned items as well as a copy of their green card or if not a permanent resident copies of their L-1 or H-1 visas will be necessary.

2) Choose a New Jersey home mortgage loan

Another important aspect of the New Jersey home mortgage loan process is actually selecting the loan, program, and rates that are best for you.  A loan officer is an invaluable resource in determining this, but it is equally important to do some research independently.

One thing to consider is how long you intend to keep the home.  For example, if you only plan to keep the house a few years it may make more sense to focus on an adjustable rate loan.  For a home that is more permanent, a fixed rate loan is the way to go.

Knowing the difference between interest rates and points is important.  Points are usually tax deductible and considered to be prepaid interest.  Points directly affect rates because the more points a homeowner is able to pay, the lower the rate becomes.

4) Get Pre-Approved for a New Jersey home mortgage loan.

Being approved is obviously a helpful tool in purchasing a home.  The advantages of pre-approval are numerous.  The buyer knows exactly which homes are in their price range. 

Having the dollar amount already set, ensures saving time not looking at homes out of your price range.

With the loan previously approved, you the buyer, has a decided advantage in the negotiation process.  The seller is aware that you can back up any offer made.  The seller will consider your offer for the house over someone who hasn't even bothered to get pre-approved. 

For example, you make an offer to the seller on the house of your dreams.  There's only one problem, 3 other people have also made an offer on the same house.  But, only YOU have given a letter (from your lender) to the seller, stating that you are already pre-approved for a home loan. 

Because the other 3 buyers aren't pre-approved, the seller goes with your offer.

The only thing left to do in the New Jersey home mortgage process -- is to actually close the loan.  The paperwork will be signed in front of notary public.  The applicant will be required to sign the paper, review the documents, and possibly have a cashier check for closing costs and down payment.

Tips on applying for a New Jersey home mortgage loan ...

Some key things to remember are to completely and accurately fill out the mortgage application form. Making an error or skipping part of the form will cost the buyer valuable time.  Immediately comply with any request for additional paperwork. Another good practice is keep banking accounts stationary. Now isn’t the time to move money around.

It also isn’t the time to make any major purchases.  Those types of withdrawals can have a negative affect on the your home mortgage application.  Avoiding going out of town near the closing date is also a good decision.  If that situation cannot be avoided, you can close your New Jersey home mortgage loan by authorizing the power of attorney to a lawyer of your choice.