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Read MoreAn Adjustable-Rate Mortgage (ARM) almost always has a lower initial interest rate than a fixed-rate mortgage. This “teaser” rate is the primary incentive for borrowers to choose an ARM, as it results in lower initial payments.
Start by comparing interest rates and fees from at least 3-4 different lenders. Look beyond the rate to the annual percentage rate (APR), which includes fees. Read online reviews and ask friends for referrals. Consider the lender’s customer service—are they responsive and easy to reach? Your real estate agent can also be a great source for reputable lender recommendations.
A lender’s reputation is a powerful indicator of the experience you are likely to have. It reflects their history of customer service, reliability, and ethical practices. A lender with a strong, positive reputation is more likely to offer transparent terms, clear communication, and a smooth, predictable closing process, which is critical for one of the largest financial transactions of your life.
You typically need to provide the most recent two months of statements for all checking, savings, and investment accounts. The statements must include your name, account number, and all transaction pages. If you have large or unusual deposits, you may need to provide additional statements to document the source of those funds.
Once you start the application, avoid any major financial changes. Do not:
Open new lines of credit or take out new loans.
Make large, undocumented cash deposits into your accounts.
Switch jobs or become self-employed.
Co-sign a loan for anyone else.
Make large purchases on credit (e.g., a new car or furniture).
