Mortgage, Part II

So today I had the meeting with the mortgage rep. We discussed my options, and determined that my best bets were an FHA loan for a condo, or a SONYMA loan for a co-op (FHA doesn't do co-op loans).

We began the application process, getting most of the paperwork ready for the underwriters. I still have to get a number of other things together. That list includes:

• W-2s from the last two years (apparently they want these to go with the tax returns)
• Paystubs (I gave them my last two, but my next one will reflect a raise, so I need to get it to them)
• Copies of my last two statements from all my accounts (including investment and retirement accounts)

Otherwise, things look good. I should get my pre-approval soon, and then it's off to start looking.

Applying for a mortgage

I'm in the early stages of planning on buying a home. With the tightened credit market, you can no longer get a realtor to show you around until you have a pre-approval letter in your hand. That means I have to start the application process.

The first step was figuring out where to apply. I considered going through a mortgage broker -- I know someone I could go to. That being said, there are plenty of fees imposed by the lender -- there was no reason for me to layer on fees from a broker. Instead, I compared rates myself -- I went to the websites of the major banks, as well as the locals for my area (credit unions included). I went to bankrate.com and checked rates. In fact, I've been doing this for the last several months (I knew I'd be buying this year, but I was nowhere near ready at that time), so I've been able to see who has consistently had the better rates.

I also have a ceiling -- I qualify for a mortgage through SONYMA, which is an FHA-like program for first-time homebuyers in New York. SONYMA's rates are set rarely -- it seems to be quarterly. So I know that at worst, I'll get the SONYMA rate (which is currently 5.5% for a 30-year fixed rate and 5.75% for a 40 year fixed rate).

So after all this research, I decided on three criteria for a lender. First, they had to offer competitive rates. Second, they had to offer FHA loans. Third, they had to offer SONYMA mortgages. I whittled the list down to a handful that met the criterion. On that list is the bank that I do my regular banking with, so it was a natural choice.

I have a meeting set for tomorrow with a mortgage rep at the bank (notably, my bank is showing once again why I feel they have very good customer service -- their mortgage office is about a mile from my office while the regular bank branch is two blocks away; the mortgage rep volunteered to meet me at the branch since it's more convenient for me). For the initial meeting, the rep only asked me to bring my last two tax returns. She said that we would go over what other documents I would need (I expect this will entail records of all my finances, as well as paystubs), and what my options are.

I'm kind of excited, and kind of nervous. I'll post tomorrow with what the mortgage rep says.