Wanna know the inside scoop on mortgage financing?    Im going to teach you how to get really cheap mortgage terms.  Just dont tell them where you heard about it.

The secret is this; organize your documentation BEFORE you call around.  If you follow these seven steps and compile a package that you can e-mail to mortgage originators, you can effectively play us off one another and get smoking great terms for a home loan.

1- Fill out a uniform residential loan application (Form 1003).  Be truthful !  Regardless of what your buddies tell you,  Sister Anastasia from Little Flower Grammar School was correct; neatness does count.

2- Get a copy of your credit report but make sure that its a tri-merged credit report.  

3- Organize your two year income and employment history.  That means you should copy the first two pages of your 1040 income tax form for the last two years,  your W-2 or 1099 forms supporting these tax forms, and your last 30 days worth of pay stubs. Be certain that your employment history, written on the loan application, matches up with your dates of employment.  Make sure that the work phone number on your loan application goes to  the person who performs the employment verifications at work.

4- Gather up your asset statements:  checking account, savings account, securities account, IRA, 401(k), and any annuities you have.  The lender will require that you  show ALL of the pages  of the statements.  Compile the last 60 days worth (so two monthly statements  or one quarterly statement).  More is better as the more money you have, the more likely it is that you'll pay back the loan.

5- If youre divorced, get a copy of the divorce decree.  If you had a bankruptcy in the past 7 years, get the filing paperwork and discharge document.

6- Now, get six sheets of paper.  In BIG magic marker, PRINT, the following:

• APPLICATION
• CREDIT
• INCOME
• ASSETS
• MISC SUPPORTING

These are your dividers.  Put the 5 page loan application behind the first sheet, the credit report behind the second sheet, the tax returns, W2 forms, and paystubs behind the third sheet, the bank and other statements behind the fourth sheet, and all the rest behind the fifth sheet.

7- Scan the package, IN ORDER, to a pdf format.  If you dont have a scanner, sign up for a pfax number for four bucks a month and fax the package to yourself.  Now you can e-mail the credit/income package to a mortgage broker to get your quote.

Im not saying youll get your mortgage for free, hardly.  If you have all of your documentation, you stand a much better chance to get the best terms.  My next post will teach how to deal with mortgage originators when you are shopping and who you should call.

by Brian Brady, America's Most Opinionated Mortgage Broker

Read the whole series: 

• How To Get The Best Home Loan - Neatness Counts When You Want a Home Loan
  How To Find Your Way Through The Home Loan Jungle - Part One

• How To Find Your Way Through The Home Loan Jungle - Part Two

• Loving Your Home Loan