7 Tips to Help You Sail Through Your Mortgage Application
If You Want Your Mortgage Process to Go Quickly and Easily, Get Ahead of the Game with These Tips
Mortgage applications get a bad rap. They’re notoriously tedious, taking weeks and weeks (sometimes even months) to get off the ground, processed and finalized and sometimes, even after all that, the mortgage doesn’t even get approved.It can be frustrating for a homebuyer—especially one who’s looking to move into a new home quickly and efficiently.
Fortunately, not every mortgage app is this time consuming. In fact, if you’re well prepared, you plan ahead and you have the right people surrounding you, a quick and painless mortgage process isn’t really that far out of reach.
Are you buying a new home? Want to sail through that application and get approved faster, easier and more efficiently? Just make sure you take these seven steps.
1. Know Your Credit Score (And Work on Getting it Higher)
Check your FICO credit score as soon as you’re considering buying a home. If it’s on the lower end (below 650), consider taking steps to improve it before applying for a mortgage. Pay off some debts, close a few credit cards and make sure you’re on top of all your monthly bills and payments. The more you can increase your credit score, the better mortgage rate you’ll get—and the easier time a lender will have approving you as a borrower.
2. Gather Your Financial Documentation Early
You’re going to need loads of financial documentation in order to get a mortgage, so go ahead and gather it up as early as possible rather than producing it one at a time when requested. You’ll need: the last two years of tax returns or W2s, your last two pay stubs, two months of bank statements, a list of all your debts (including credit cards, student loans, car loans and more), and statements for all of your assets, like savings accounts, mutual funds and investments. Submitting all of these up front—and at once— will help speed up your loan process and make things easier for your lender.
3. Get Pre-qualified
You always want to get pre-qualified for a loan, even before you start looking for a property. For one, this gives you an idea of what sort of mortgage rate you can get, and it can help guide you in what price range to be looking in. On top of this, it also makes the mortgage process infinitely easier once you do find a home. Because you’ve been pre-qualified, your lender already has most of the paperwork they need, and they’ve already run your credit, background check and other info to make sure you meet their standards. That means smooth sailing is ahead.
4. Choose the Right Professionals
Inexperience will always cause lag time, so you’ll want to surround yourself with the best professionals you can. That means choosing a great lender, selecting the right loan officer, hiring an experienced real estate agent and even finding the best home inspector you can. The quicker, more efficient and more knowledgeable your pros are, the easier your mortgage process will be on the whole.
5. Talk to Your Employers
Unless you’re self-employed, you’ll need your employment verified. The lender will contact your employer and send them a form to fill out, verifying your position at the company. Unfortunately, we all know how busy and flustered employers can get when they’re bogged down with work, and sadly, many times these requests get brushed under the rug and forgotten about. Before your lender talks with your employer, make sure to prepare them for what’s ahead. Tell them what to expect, when to expect it and emphasize that it’s very important to you that they make it a priority.
6. Respond Quickly
No matter how well you gather and organize your paperwork in the beginning, chances are your lender will still have a few loose ends that need to be tied up. They’ll need another form or bank statement, or they’ll need you to come in and sign something. Whatever it is, make sure you respond quickly. Your lender can’t proceed without your input, so the longer you wait, the more you hold up the application process!
7. Avoid Big Purchases—and New Credit—During the Process
Your credit profile shouldn’t change while you’re applying for a mortgage, so don’t take this time to open up a new credit card or apply for a small business loan. You’ll also want to avoid any big purchases that could eat into your savings (which are typically used for a down payment) or make you look like less of a responsible borrower. Keep a close eye on your finances during the mortgage application process, and don’t go on a spending spree until after you’ve closed on the home.
Don’t twiddle your thumbs and wait for the lender to do all the work. If you want your mortgage process to go quickly and easily, get ahead of the game. Take these steps, and start getting your application in order now—long before you’ve found that dream home.