Applying for a mortgage can be an extremely confusing thing to do, especially for first time homebuyers. What bank should you work with, who has the best rate, who can you trust to do the best job for you, should you use a mortgage banker or a mortgage broker and many other questions are at the forefront of many consumer's minds. The first thing that you need to do before you apply for a mortgage is to sit down by yourself or with your spouse and figure out a budget along with your present, short term and long term financial goals. This way you will have a better idea as to what type of mortgage will be best for you along with a very accurate idea of how much of a payment you can afford to continue living the lifestyle you are accustomed to.

The second step in applying for a mortgage is to figure out who you should work with, a traditional bank, a credit union, a mortgage broker, a mortgage bank, etc... Who to choose can often be a difficult choice. Banks traditionally only have one set of underwriting guidelines and they are usually very picky about who they approve for mortgages. Mortgage banks will generally be a little less strict than normal banks, however they usually will offer retail prices on their rates so you may not always be able to obtain the best interest rate that is available. Credit Unions can many times offer financing on things that mortgage banks and traditional banks can not, however they do not always provide the best rates for what they offer. I do highly recommend considering becoming a member of a credit union though because they do have some very aggressive items that may be worth looking into for all different types of financing and investing. Mortgage brokers can usually shop your loan around with hundreds of different lenders and obtain wholesale rates offering the best of both worlds, however which one should you use. In this step, you should look at your newspaper over the weekend to see if any banks are having any rate specials for new mortgages, if so try applying for a mortgage with them as the first company. Next, you should look into a mortgage bank such as a Countrywide or Quicken loans or somebody and see what they can offer you. Finally, contact a mortgage broker in your area and see what they have to offer you as well. If you have shaky credit the mortgage broker will be your best option. You can also ask family, friends and or co-workers for recommendations as to who they have used in the past and if they were happy with them.

Finally, after you have found out who you would like to work with you will need to provide them with income documentation, asset verification, homeowners insurance information, purchase agreement (if applicable) and some other documents may be necessary depending on your situation. The mortgage loan process can be done in anywhere from as little as a week up to 3-4 weeks on average depending on whether you are refinancing or buying a home and how long your purchase contract states you have until closing. Therefore, shop around with a coupe of different lenders and brokers, ask family and friends for referrals, and sit down and prepare a budget along with your financial goals in order to begin the mortgage application process.