Fairway's First Time Home Buyer Guide

Homebuyers Guide Whether you are buying your first home, moving across town or refinancing, our Homebuyers Guide provides valuable information to help you prepare for the loan process so you know what to expect.

As one of the nation’s top mortgage companies, Fairway helps individuals and families reach the American Dream of homeownership every day. Owning a home is an exciting investment and comes with many benefits including…

In order to make sure that during the loan processing your credit and qualification information does not change and affect your ability to be approved, be sure to follow our Do's and Don’ts below. This information is important from the day you apply until the day your loan closes and funds.

  • DO

    Keep originals or be able to access on your employer/bank sites all pay-stubs, bank statements and other important financial documents.

  • DO

    Provide your Earnest Money Deposit from your own personal bank account or acceptable gift funds. Please talk to your loan officer or loan coordinator for additional clarification. This will present a very difficult problem if not managed properly in the beginning.

  • DO

    Provide all documentation for the sale of your current home, including sales contract, closing statement, employer relocation/buy-out program if applicable.

  • DO

    Notify your Loan Officer or Loan Coordinator if you plan to receive gift funds for closing. Gift funds are acceptable only if certain criteria are met. Advances from credit cards for down payment / closing costs are never acceptable.

  • DO

    Notify your Loan Officer or Loan Coordinator of any employment changes such as recent raise, promotion, transfer, change of pay status, for example, salary to commission.

  • DO

    Be aware that a new credit report could be pulled just prior to closing.

  • DON'T

    Close or open any asset accounts or transfer funds between accounts without asking your loan officer about the proper documentation required for your loan. For example, before transferring all funds from your savings to your checking, check with your loan officer.

  • DON'T

    Deposit any monies outside of your automated payroll deposits, particularly cash or sale of personal property, without notifying your Loan Officer or Loan Coordinator. Many guidelines require substantial documentation as to the source of these deposits.

  • DON'T

    Change jobs/employer without inquiring about the impact this change might have on your loan.

  • DON'T

    Make major purchases prior or during to closing such as new car, furniture, appliances, etc. as this may impact your qualifying amount.

  • DON'T

    Open or increase any liabilities, including credit cards, student loans or other lines of credit during the loan process as it may impact your qualifying amount.

Keep your credit card balances low.

A major factor in determining your score is how much revolving credit (credit cards) you have versus the amount that you are actually using. Pay down your balances and keep your debt-to-credit ratio less than 30%. Remember the smaller the percentage, the better your rating.

Pay your bills on time.

Late payments can negatively impact your score, so consider setting up automatic payments from your bank accounts. The longer you pay your bills on time, the higher your credit score

Don’t open unnecessary accounts

New accounts lower your average account age, which can possibly lower your score. Instead, maintain your older accounts by keeping the balances low.

If you have been managing credit for a short time, don’t open new accounts too rapidly.

If you are a new credit user, rapid account buildup can look risky. Plus, remember new accounts will lower your average account age, which will have a larger effect on your scores if you don’t have a lot of other credit information.

If married, keep separate credit cards.

Keeping separate cards provides flexibility in transferring some or all of the balances to one spouse to increase the credit score of the other. This also provides the possibility of one spouse becoming the sole borrower without changing the ownership of the home.

In order to start your mortgage application, you will need to gather the following standard documentation. Some of the additional required information will vary based on your personal situation.

Standard Documentation for All Borrowers

  • W-2 forms (previous 2 years)
  • Paycheck stubs (last 30 days - most current)
  • Employer name and address (2 year history including any gaps)
  • Bank accounts statement (recent 2 months – all pages plus all non-payroll deposits must be documented so make a copy of the check before depositing)
  • Statements for 401(k)s, stocks and other investments (most recent)
  • Signed federal tax returns (previous 2 years)
  • Residency history (2 year history with name, phone number, address and account number of landlord or mortgage company)
  • Photo identification for applicant and co-applicant (valid Driver’s License or Passport)
  • Check or credit card information for credit report and appraisal fee
  • New home Sales Agreement, specifications, plans and/or legal description

Additional Required Documentation (if applicable)

Divorced Borrowers
  • Divorce Decree
Self-Employed Borrowers
  • Copies of most recent 2 years corporate tax returns (with all schedules)
  • YTD profit and loss statement and balance sheet
  • Copy of business license or CPA contact information
  • 1099s or K1 forms
  • Copy of Note, Deed of Trust or Mortgage
  • HUD-1 Settlement Statement/Closing Disclosure
  • Survey
  • Homeowner’s insurance information
Borrowers Selling Current Home
  • Contract for home being sold
Eligible Active Military or Veterans
  • Veteran DD214 or Veteran Reservists DD256
  • Certificate of Eligibility
Previous Bankruptcy
  • Petition and Discharge
  • Supporting schedules A through K
Relocation Agreement
  • If relocation move is financed by employer, such as a buyout agreement plus documentation outlining company paid closing costs benefits
*Additional items may be requested during the loan underwriting phase if more information is required to guarantee your loan.

Our team strives to make the home loan process as simple as possible by guiding you through every step – from application to closing and beyond. We will also provide you with regular updates to keep you informed on the status of your loan throughout the entire process.

Step 1: Initial Consultation

We recommend reaching out to your Fairway mortgage professional via email, phone or in person to discuss your homeownership goals. This initial consultation covers how long you plan on living in the home, the amount of down payment you will need, and how much you want your monthly payments to be.

Step 2: Pre-Qualification

A pre-qualification determines how much money you will be eligible to borrow before you actually apply for a loan. It is very important to understand that a pre-qualification does not guarantee a loan. During this step, we gather your financial information and make a conditional determination about your qualifications. You can review our Document Checklist for the basic information required.

*A pre-qualification is not an approval of credit and does not signify that underwriting requirements have been met.

Step 3: Processing

After you have completed a loan application, your mortgage professional collects all required documents and submits your loan file to the loan processor. The processor reviews your file and orders your property appraisal. Depending on your situation, the processor may need additional documentation during this step. Once your loan file is completed, the processor submits it to underwriting for approval.

Step 4: Underwriting

The underwriter reviews your loan file to ensure all guidelines are met for the specific loan program and issues a loan decision. Once your mortgage has been approved and all conditions have been cleared, your loan is moved to “Clear to Close” status.

Step 5: Pre-Closing

You will receive a loan commitment letter which contains the details of your loan including rate, amount and term along with any outstanding conditions that need to be addressed before the file is sent to closing. Once everything is cleared by the underwriter, our closing department will complete your final documents.

Step 6: Closing

During closing, you will sign a variety of final documents. Be sure to bring a photo ID along with the proper form of payment to cover your down payment, closing costs, prepaid interest, taxes, insurance or any additional costs. After the closing documents are completed and all funds have been disbursed, you will receive the keys to your new home!

A mortgage is a loan associated with real estate, where the property being purchased acts as the collateral for the loan. This means that the property is the security for the loan, so that if the borrower fails to make the payments, the lender can acquire and sell the property to regain the money lent. This use of the property as collateral is a big part of what keeps mortgage rates lower than that of a credit card, for example.

Mortgage Payment

Principal (P) – The portion of your payment that goes toward the principal balance (the remaining amount due) of the loan

Interest (I) – The portion of your payment that pays the lender

Taxes (T) – The portion of your payment that pays your property taxes each year

Insurance (I) – The portion of your payment that pays your homeowners insurance policy each year

Mortgage Insurance (MI) – The portion of your payment that goes to the mortgage insurance company; mortgage insurance is not paid on all mortgages

Appraisals are a key component of the home buying process. A thorough appraisal will look at the following areas of the home while conducting their inspection, but they may look at other areas as well. This may not be an exclusive list of items an appraiser will inspect.


GFCI outlets in the kitchen and all bathrooms; exposed fuse boxes or wires will be flagged.


There cannot be cracks in the foundation


Handrails have to be on all staircases with three steps or more (this includes but isn’t limited to, steps outside to a deck and stairs in the basement).

Heating Source

A central heating source is required and has to be 100% operational and safe. If a home only has one source of heat and it’s from a wood stove or a pellet stove, it will need a central heating system. The central heating system must be able to heat the home for a minimum of 30 days without being attended to.

Interior Walls

Interior walls must be complete. Sheet rocked walls that are unpainted will not be accepted.


Moisture found inside of a home will be flagged by an appraiser. Basements are not an exception to this rule.


If any windows or doors have cracks in them, they have to be replaced prior to the appraisal.


Garages, sheds, and/or outbuildings also have to pass the same guidelines as above and must not have chipping/peeling paint or exposed raw wood.


The inside and outside of the home must be painted; peeling paint will not be accepted.

Raw Wood

Any exposed raw wood on the exterior of the home that is untreated with paint or stain will be flagged.


Shingles that are curling or missing will be flagged; if the appraiser thinks there is less than five years left on roof, it will be flagged.


The location of the septic tank or leach field must be known. Issues could arise if the septic tank has not been pumped or serviced in over five years.


The location of the well needs to be known. If it’s a dug well, please contact your Realtor or lender immediately. A water flow test and complete safety report will be required.

Window and Door Sills

Rotting wood, chipping or peeling paint will be flagged.

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