Prepare for the interview by having all requested documentation, addresses, forms, and pre-application worksheet completed before meeting with the loan officer. This will speed the interview process and give the lender a better understanding of your situation.

Required Documentationms you should bring to the loan interview: 

• The purchase contract.
• All bank account numbers, bank addresses, and most recent bank statements.
• W-2 forms for the last two years, pay stubs, or other proof of employment and salary. If you are self-employed, bring tax returns, balance sheets and profit & loss statements for the last two years in addition to the current year-to-date profit and loss statement.
• An itemized listing of debts, credit card numbers, and names and addresses of creditors.
• Evidence of your current mortgage or rental payments (i.e. a canceled check).

If you have not already pre-qualified with a lender, traditional underwriting guidelines require that:

• your monthly mortgage payment (including taxes, insurance, and condominium fee) not exceed 28% of gross monthly income
• total monthly mortgage payments plus any existing debt,  not exceed 36% of gross monthly income.

Some special loan programs will allow higher ratios up to 33% and 38% respectively, however you should consult with your lender to see if you are qualified.

The Loan Application

The application form will allow the lender to analyze the four C’s of credit – capacity, credit history, capital, and collateral. The lender will use the application as the basis for evaluating the risk in lending you money.

• Capacity – Your length of employment, earnings and occupation provide the lender with information about your earning capacity and future ability to repay the debt. Expenses, the number of dependents you have, the amount of other obligations, and whether you pay alimony or child support are also considered.
• Credit History – Your credit history tells the lender how much you owe, your frequency of borrowing, and whether or not you pay your bills on time. Lenders look for stability in residency, job, and debt repayments. 
• Capital – Lenders will analyze your ability to come up with the down payment and closing costs, whether or not the down payment will be provided as a gift from a relative, and the amount of cushion (excess funds) remaining after purchase.
• Collateral - The property provides protection for the lender in the event you fail to repay the loan.  The lender must be sure that the value of the property is sufficient to back up the loan.

Other Considerations: Attempting to cover up  past credit problems in the hope that the lender will not discover them will not help you.  It is better to remain truthful and try to show the lender that any credit  problems are now behind you.  Once the application is signed, you may be bound to accept the loan if it is offered to you or be required to pay any processing costs if the application is rejected.  

Lock-In  

If interest rates are anticipated to rise while the loan is being processed, your lender may encourage you to "lock-in" the current rate and points for a given period of time.  Be sure to get the lock-in in writing and find out how long the lock-in takes effect.  Very short lock-ins are generally useless and you should seek a "lock-in" that will be of sufficient length to complete closing. 

Closing Cost Estimates

After you submit your application, the lender is required by law to provide you, within three (3) business days, an itemized estimate of the costs to "close" or settle the loan.  This statement, referred to as the "good faith estimate",  details the anticipated costs in connection with the loan and must also accompany a copy of a government publication entitled "A Home Buyer's Guide to Settlement Costs".  

Lender Followup

It is a good idea to occasionally check the status of your loan application with the lender.  You may also want to contact your employer and any others who need to provide information to the lender in order to help expedite the processing of your application.