How Do You Get a Mortgage in Portland, Maine?

Where does a Portland mortgage actually start?

You find it on a Sunday. It's a white cape off Stevens Avenue with fresh black shutters, a granite front step, and a lilac by the side door. You've driven past it three times this month, and now there's a sign on the lawn.

That's usually when clients call me, and I understand why. Wanting the house is the easy part. Getting a mortgage in Portland is a chain of steps in a set order, and each one makes the next one easier.

My Portland mortgage guide covers the neighborhoods and the local picture. This post walks you through the steps themselves, in the order they happen. If you do them in order, the house on the Sunday drive stops being a daydream.

What does a preapproval letter really tell a seller?

A preapproval letter says a lender is generally willing to lend you up to a certain amount, based on certain assumptions. It helps you make an offer, because it tells the seller you can likely get financing. It is not a guaranteed loan offer.

A preapproval letter is a handshake, not a promise.

Some lenders call it a prequalification and some call it a preapproval, and the label tells you less than you'd think. What matters is whether anyone actually checked your income, assets, and credit. When I write one for clients, I verify those first, so the letter holds up when a seller's agent calls to ask about it.

Which documents should you gather before you apply?

Every lender wants proof that you can repay the loan. That starts with a short stack of documents you likely already have on file. Here is the usual list.

• Pay stubs from the most recent two months
• W2 forms for the last two years
• Tax returns for the last two years if you're self employed, earn commission, or have rental income
• Recent statements for your bank and retirement accounts
• A photo ID

Lenders use those papers to figure out your debt to income ratio, or DTI. That's your monthly debt payments divided by your gross monthly income, and each loan program sets its own limit. I figure your DTI up front so we know which programs fit before you fall for a house.

Does shopping more than one lender hurt your credit?

Not the way most people fear. Multiple mortgage credit checks within a 45 day window count as a single inquiry on your credit report. Credit scoring models give mortgage shoppers that room on purpose, so compare freely inside the window.

Plenty of buyers skip the comparison anyway. A federal survey found that almost half of home purchase borrowers seriously considered only one lender or broker before they applied. That's a lot of people taking the first offer on the biggest purchase of their lives.

As a mortgage broker, I don't lend money myself. I work with multiple lenders, so one application gets your file in front of several of them. If you're torn, here is how a mortgage broker compares with a bank in Maine.

What happens between the handshake and the keys?

After the seller accepts your offer, you formally apply. The lender must send you a Loan Estimate within three business days of receiving your application. It lays out your estimated monthly payment and closing costs, so you can compare offers side by side.

Next comes the appraisal. An appraiser gives an opinion of the home's market value so the lender can make sure the price lines up with the property. You have the right to a free copy of that appraisal at least three business days before closing. On an older Portland house, read it closely.

Then underwriting works through your file and may ask for a letter explaining a deposit or an updated statement. Answer fast and the file keeps moving. Don't open a new credit card or take on a car loan while you wait.

You'll get your Closing Disclosure at least three business days before closing. That gives you time to check the final terms against your Loan Estimate and ask questions.

What does closing day look like in Maine?

In Maine, you sign the papers and the deed gets recorded at the county registry of deeds. For Portland that's Cumberland County. Maine charges a real estate transfer tax when the deed is recorded, and the law splits it evenly between buyer and seller. Your half shows up on your Closing Disclosure, so it shouldn't surprise you.

Before you sign anything, build a real monthly budget that includes property taxes and homeowners insurance, not just principal and interest. My Maine mortgage calculator will get you close.

Then you sign, the deed is recorded, and you walk out with a key on a ring. The white cape on Stevens Avenue is yours.

FAQ

What's the difference between prequalification and preapproval?

Both are letters saying a lender is generally willing to lend up to a certain amount, and neither is a guaranteed loan offer. Lenders use the two words differently. What matters is whether your income, assets, and credit were actually verified.

Will shopping for a mortgage hurt my credit?

Multiple mortgage credit checks within a 45 day window count as a single inquiry on your credit report. So you can compare lenders without piling up damage. Avoid opening new credit cards or car loans while you shop.

Who pays the Maine real estate transfer tax?

Maine law splits the real estate transfer tax evenly, half on the seller and half on the buyer. The registry of deeds collects it when the deed is recorded. Your share appears on your Closing Disclosure.

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Thinking about a house in Portland, or anywhere in Maine? Call or text me at (207) 615-7770 and I'll walk you through your preapproval step by step.

Started in 2004 and I'm still here.