Category - Applying for a Loan
Before making any offers and sometimes even before looking at homes you should work with 3-4 different banks, including mortgage brokers and get pre-qualified for loans. Many lenders will actually get you pre-qualified without even running your credit. The purpose here is to give you an idea of what you can actually afford.
Each lender will have their own requirements about pre-approvals and they will each do this at a specific point in the process. When submitting an offer for the house you want to buy, your agent will want to include a copy of your pre-approval for the loan with the offer. This is to give the seller an assurance that you are working with a lender and will be able to secure a loan. Other lenders, will only give you a pre-qualification letter and will get you into a pre-approval state once you have an offer accepted by the seller.
You may or may not want to lock-in your interest rate depending on wether you think rates will go up or down. As of this writing in October 2015 all signs points to higher interest rates so for me, this was a give. I tried to lock-in my rate as early as possible.
Comparing loans is no easy task. There are dozens of things to compare and look into. For example: are you doing a traditional loan or an FHA loan? Are you considered conventional or jumbo? Each county has their own definition of what a jumbo loan is.
Depending on your situation you will need to gather dozens of documents. I highly recommend you use a folder on Dropbox, Google Drive (or whatever your cloud file storage solution of preference is) to track any and all documents you send it. You may need to send these documents in multiple times.