Real Estate in Charleston
John G. Foscolos

Getting a Home Loan for your Charleston Home

Once you’ve decided that home ownership is the right choice, obtaining a home loan is the next step. With dozens of loan types to choose from, and thousands of loan sources available, getting started down this road can be intimidating. Relax, take a deep breath, and stop clicking on all those loan sites offering everything under the sun! First, you’ll need to know…

How much can you afford?
Most lenders will find a way to offer you as much money as possible. While it may be tempting to accept, you need to analyze all of your expenses in relation to income not only now, but 15 or 30 years down the road. Decide what you can afford to pay on a monthly basis, and stick to your guns.

Shopping for a Loan
When you’re ready to start looking for a loan, note that there are two primary sources: direct lenders and mortgage brokers. Lenders actually loan you the money that you pay back to them. Mortgage brokers act as a middleman, and actually shop among lenders for you, to obtain the best option among all of the choices. While this is a nice service, their fee will be buried somewhere within your final loan. Many loan shoppers still find that a broker is worth the cost. After deciding on your loan source, you’ll need to decide on the best options for you. Variables will include:

  • Interest Rate
  • Loan Term (length, usually 15 or 30 years)
  • Points (1 point is 1% of your loan)
  • Cost of Loan
  • Broker Fees, if applicable
  • Prepayment Penalties
  • Application Fee
  • Credit Report Fee
  • Appraisal
  • Etc…

Applying for a Loan
This part will be easy, assuming you have all necessary documents. You’ll need:

  • 2 to 3 years worth of W-2 forms, or business tax forms if you’re self-employed, for each person signing the loan
  • Personal tax forms for the past 2 to 3 years
  • At least one month of pay stubs for each person signing the form
  • At least 2 months of bank account statements for both checking and savings accounts
  • Most recent 401K or retirement account statement
  • At least 2 months of brokerage account statements
  • Account numbers for all credit cards, and their account balances
  • All loan information for other outstanding loans (car, student, etc.)
  • Proof of any additional income, such as child support, pension, etc.
  • Addresses where you’ve lived for at least the last 5 years