The home mortgage application process is a critically important part of buying a home for most people today. With a wide variety of mortgages available, however, many prospective home buyers can experience confusion during the initial mortgage application process. If you are preparing to apply for a home mortgage and have questions, the following information can help you feel more informed and better able to make the right decision for your home buying needs. 

1. What are discount points? 

Mortgage loan discount points are used to reduce the interest rate. Equal to one percent of the mortgage loan amount, they are prepaid and often used by sellers as an incentive for a buyer to choose their home over another. 

2. Will making a larger down payment really save money? 

The answer to this is a resounding yes, and prospective buyers should always plan to make as large of down payment as possible when buying a home. Larger down payments actually save buyers money by both allowing them to get a mortgage with lower interest rates and better repayment terms. If the down payment is at least twenty percent of the purchase price, buyers will not have to pay prime mortgage interest on their loan, which amounts to significant savings. 

3. What documents are required when making application for a home mortgage? 

Mortgage lenders and banks must verify personal, financial, and employment information when working with home mortgage applicants and will ask for documentation, including: 

• photo identification, such as driver's licenses, passports, etc. 
• current banking information, usually in the form of the most recent two months of statements
• copies of the current tax return, complete with W-2 documents, or the equivalent for those who are self-employed
• the two most recent pay stubs

The mortgage lender will also have the loan applicants provide a list of current debts and assets, to help present the most complete financial picture. 

4. What should I not do while working through the loan application process? 

The period of time during which a home buyer is working on the mortgage application and loan approval process is critically important. Any changes in the buyer's circumstances that occur during this time have the potential to postpone or even completely derail their home purchase, including a job loss or job change or taking on new debt. 

The best way to enjoy a worry-free home mortgage application and approval process is to work closely with a trusted mortgage lender in your area. These financial experts can advise their clients and offer helpful information to help them become successful homeowners. 

For more information, contact a company like Attorneys Funding Group, Inc.