Serena Russell ~ Bay Area Real Estate Specialist

The loan approval process generally begins with an initial interview where you and a mortgage professional discuss the potential loan.

You may prefer to talk with the loan agent before house hunting to determine in advance how much you can afford and the mortgage amount for which you can qualify. This step is called pre-qualification and can save you time and trouble by making certain you are looking in the correct price range.

To get prepared, here are some of the items a lender might ask for:

* To complete the Mortgage Application, you will need to gather: A purchase contract for the house (if you have one)

* Your bank account numbers and the address of your bank branch, along with checking and savings account statements for the previous 2-3 months

* Pay stubs, W2 withholding forms, tax returns for two years, or other proof of employment and income verification

* Credit card bills for the past few billing periods, or canceled checks for rent or utility bill payments, to show payment history and amount of revolving debt

* Information on other consumer debt such as car loans, furniture loans, student loans and retail credit cards

* Balance sheets and tax returns, if you are self-employed

* Any gift letters, if you are using a gift from a parent or relative or other organization to help pay the down payment and/or closing costs. This letter simply states that the money is in fact a gift and will not have to be repaid.

Having these items on hand when you visit the mortgage company will help speed up the application process. Usually an appraisal fee will have to be paid when you submit the mortgage application. After you speak with the loan agent, you should have a general idea if you qualify for the size and type of loan you want. It usually takes a couple of days to find out how much you qualify for.