Before You Apply
Document Checklist
Gathering your paperwork ahead of time is the single best way to speed up the mortgage process. Here is what you will need:
Property Documents
- Signed sales contract including all riders and addendums
- Verification of earnest money deposit
- Names, addresses, and phone numbers of all realtors, builders, insurance agents, and attorneys involved
- Copy of listing sheet and legal description (for condos: declaration, by-laws, and most recent budget)
Income Verification
- Pay stubs from the most recent 30-day period with year-to-date earnings
- W-2 forms from the past two years
- Names and addresses of all employers from the last two years
- Letter explaining any gaps in employment over the past two years
- Work visa or green card (copy of front and back)
Self-Employed or Commission Income
- Full federal tax returns for the last two years plus year-to-date profit and loss statement
- K-1 forms for all partnerships and S-Corporations from the last two years
- Completed and signed Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) for the last two years if ownership is 25% or greater
Down Payment & Assets
- Bank statements from the last three months (savings, checking, money market)
- Statements from brokerage accounts or copies of stock/bond certificates
- If selling an existing home: signed sales contract and listing agreement
- Gift funds: signed Gift Affidavit and proof that funds were received
Debts & Obligations
- List of all current debts: creditor names, account numbers, balances, and monthly payments with recent statements
- Mortgage statements or landlord contact information for the last two years
- If paying alimony or child support: marital settlement agreement or court order
Loan Programs
Mortgage Types Explained
Not every loan works for every borrower. Here is a plain-language breakdown of the most common mortgage products available through PierPoint Mortgage.
Conventional Loan
The most common mortgage type. Requires a credit score of 620+ and as little as 3% down. Offered in fixed-rate and adjustable-rate options with terms of 15 or 30 years. PMI required if down payment is below 20%.
FHA Loan
Government-backed loan insured by the Federal Housing Administration. Accepts credit scores as low as 500 with 10% down, or 580+ with just 3.5% down. Popular with first-time homebuyers. Requires both upfront and annual mortgage insurance.
VA Loan
Exclusive to eligible veterans, active-duty service members, and surviving spouses. Offers 0% down payment, no PMI, and competitive interest rates. One of the strongest loan products available for those who qualify.
USDA Loan
Zero-down-payment loan for homes in eligible rural and suburban areas. Backed by the U.S. Department of Agriculture. Income limits apply based on household size and location. A great option for buyers outside major metro areas.
Jumbo Loan
For loan amounts that exceed conforming loan limits set by the FHFA (currently $766,550 in most areas). Requires strong credit, higher down payments, and substantial reserves. Ideal for purchasing high-value properties.
Bank Statement Loan
Designed for self-employed borrowers who may not have traditional W-2 income documentation. Uses 12 to 24 months of bank statements to verify income instead. Flexible qualification criteria with competitive rates.
DSCR Loan
Debt Service Coverage Ratio loans are built for real estate investors. Qualification is based on the rental income the property generates rather than the borrower’s personal income. No tax returns or employment verification required.
Reverse Mortgage
Available to homeowners aged 62 and older. Converts home equity into cash — received as a lump sum, monthly payments, or line of credit — without requiring monthly mortgage payments. The loan is repaid when the borrower sells, moves, or passes away.
Key Terms
Mortgage Glossary
Mortgage paperwork is full of industry jargon. Here are the terms you will encounter most often, explained simply.
- Appraisal
- A professional estimate of a property’s fair market value, performed by a state-licensed appraiser. Required by lenders before loan approval to confirm the home is worth the loan amount.
- Closing Costs
- Fees and expenses paid at the end of the mortgage transaction, typically 2% to 5% of the loan amount. Includes appraisal fees, title insurance, attorney fees, and prepaid taxes or insurance.
- DTI (Debt-to-Income Ratio)
- The percentage of your gross monthly income that goes toward paying debts. Lenders use this to assess your ability to manage monthly payments. Most conventional loans require a DTI below 45%.
- Escrow
- An account held by a third party that collects and disburses funds for property taxes and homeowners insurance as part of your monthly mortgage payment.
- Equity
- The difference between your home’s current market value and the remaining balance on your mortgage. Equity builds as you make payments and as your property appreciates in value.
- LTV (Loan-to-Value Ratio)
- The ratio of your loan amount to the appraised value of the property. An 80% LTV means you are borrowing 80% of the home’s value. Lower LTV ratios generally qualify for better rates.
- Pre-Approval
- A lender’s written commitment to lend you a specific amount based on a review of your credit, income, and assets. Stronger than pre-qualification and signals to sellers that you are a serious buyer.
- PMI (Private Mortgage Insurance)
- Insurance required on conventional loans when the down payment is less than 20%. Protects the lender if you default. Can be removed once you reach 20% equity in the home.
- Principal
- The original amount of money borrowed in a mortgage, not including interest. Each monthly payment applies a portion toward reducing the principal balance.
- Refinancing
- Replacing your existing mortgage with a new loan, typically to secure a lower interest rate, change the loan term, or access home equity through a cash-out refinance.
- Title Insurance
- A one-time insurance policy that protects the buyer and lender against claims or disputes over property ownership. Purchased during closing and covers issues like liens, encumbrances, or ownership errors.
- Underwriting
- The process where the lender evaluates your financial profile — credit, income, assets, debts — to determine whether to approve your loan application and under what terms.
Appraisals
Understanding Home Appraisals
An appraisal is an independent estimate of a property’s fair market value performed by a state-licensed appraiser. Lenders require an appraisal before approving a loan to ensure the mortgage amount does not exceed what the property is actually worth.
When You Might Need an Appraisal
Beyond the mortgage process, appraisals are used for contesting property taxes, establishing replacement cost for insurance, divorce or estate settlements, negotiating a fair sale price, and satisfying government agency requirements.
How Appraisers Determine Value
Appraisers use three primary methods. The Sales Comparison Approach identifies three to four recently sold comparable properties within a half-mile and compares square footage, bedrooms, bathrooms, lot size, age, and condition. The Cost Approach calculates what it would cost to rebuild the property from scratch minus depreciation, plus land value. The Income Approach is used for rental or investment properties and capitalizes the net income the property generates to arrive at a value.
Who Owns the Appraisal Report?
The mortgage company owns the appraisal report even though you paid for it. This is because the lender orders the appraisal on your behalf. You have the legal right to receive a copy of the report, but the original belongs to the lender.
Ready to Get Started?
Call us at (844) 241-7720 or apply online. We will walk you through every step.
