Financing Your Home
Now that you are ready to purchase a home, there are several things to consider before choosing a lender.  The first thing most people look at is the interest rate, and while this is important, it shouldn't be the only factor.  In today's economy, most lenders are competitive on interest rates, but some things that differentiate a lender is their customer service, their performance record, and their fees.  When interviewing lenders, find out what their hours are and if you can contact them by cell phone after hours and on weekends.  A good lender is available when you need them.  Next find out how many clients that they issued a pre-approval letter for in the last year that ultimately were not able to obtain financing.  This number should be very low.  Anything more than 2 or 3 should be a red flag.  Remember that once you are under contract, if the lender is unable to get your financing closed, it is your earnest money on the line and not theirs.

Where will you get your financing?  There are numerous sources for home financing.  Some are better than others.  Find out what is best for your particular needs.
    1.  National Banks
    2.  Regional and Local Banks
    3.  Credit Unions
    4.  Mortgage Bankers
    5.  Mortgage Brokers
    6.  Private Lenders (Hard Money Lenders)

Once you have identified a type of lender you would like to work with, there are many types of loan programs to consider.  Here is a list of the most popular types of loans.
    1.  Conventional Mortgage
    2.  Construction Loan 
    3.  FHA Mortgage
    4.  UDSA Mortgage
    5.  VA Loan
    6.  Texas Vet Loan

What style of loans are available?  Here is a list of the most common loans.
    1.  30 year fixed interest
    2.  15 year fixed interest
    3.  Adjustable Rate Mortgage (ARM) - Many styles available.
    4.  Balloon Payment
    5.  Interest Only

How much money will you put towards the down payment?  A lot depends on the type and style of loan you select along with the terms of the loan and how the home will be used.  Keep in mind that most loans that finance more than 80% of the purchase price require you to purchase Private Mortgage Insurance (PMI).
    1.  80/20 - 80% loan, 20% down payment 
    2.  80/10/10 - 80% 1st mortgage, 10% second Mortgage, 10% down payment
    3.  80/15/5 - 80% 1st mortgage, 15% second Mortgage, 5% down payment
    4.  90/10 - 90% loan, 10% down payment 
    5.  95/5 - 95% loan, 5% down payment
    6.  96.5/3.5 (FHA) - 96.5% loan, 3.5% down payment
    7.  100% - 100% financing

For the initial loan application, you will only need to provide some basic information.  Once you make an offer on a property and the lender is getting ready to submit for loan approval, you will need to provide additional documentation.  Here are some of the things the lender may ask you to provide.
    1.  Income Tax Returns
    2.  Pay Stubs
    3.  Bank Statements
    4.  Investment Account Statements
    5.  Proof of Funds

Locking in your interest rate.  Most lenders offer an interest rate lock that is good for 30 days.  Some may offer a longer lock and some may allow you to extend your lock.  The purpose of a lock is to protect you from interest rates going up, but they can hurt you if rates go down.  Talk to your lender and your agent before making the decision to lock.

Ensure good communication with your lender and your agent.  Often times the terms of your loan will have a direct effect on your contract to purchase the home.  Your agent and lender need to be in close contact to make sure that you are protected by the terms of the contract.