Getting a mortgage may seem like one of the hardest decisions and one of the most stressful components in the homebuying process. There are many options to choose from that need careful thought, some research, and help from a local loan officer. Here are some tips that you can look at to ease the process of getting a mortgage.
1. Get a mortgage pre-approval instead of a mortgage pre-qualification.
Getting pre-approved for a mortgage is an in-depth process that involves running a credit check on yourself and verifying your income and assets. This in-depth process will look at how much you can afford as well as the interest rate that you would pay on the loan. If you are serious about buying a home, you will need to get pre-approved since many sellers will only accept offers from buyers that have a pre-approval done. Even if sellers don’t require you to be pre-approved, it will make your offer stand out from the rest!
Starting the pre-approval process may seem hard, but it is fairly simple. To get started your loan officer will let you know what personal and financial information you need to submit to them. Once you supply the appropriate documents they will review everything and provide you with your pre-approval letter as well as information on the funds from the mortgage. These funds are usually available shortly after a seller accepts your offer on the home.
2. Save your cash and avoid moving your money around.
If you have a low balance in your bank account when you walk in to speak to a local loan officer, your home loan application can easily be rejected. In order to get pre-approved, you have to show that you have enough cash to be able to afford a down payment on the home you’re putting an offer on. When saving your cash, avoid shifting large amounts of money in and out of your accounts during the homebuying process, especially when you are trying to get approved for a mortgage. Keep in mind that underwriters will be checking and keeping track of your finances while you are in the homebuying process.
3. Avoid changing jobs shortly before closing the deal.
When getting pre-approved for your mortgage, it is beneficial to show that you have at least two years of consistent income history. Any changes to your employment or income status can stop or greatly delay the mortgage process. Loan officers need to be able to evaluate your finances throughout the process to see if you are still qualifying for the loan. Job changes can also raise red flags for underwriters who want to make sure you are still able to qualify for the loan.
Underwriters hold a big role in whether you are qualified to get a home mortgage, so take careful steps to avoid raising red flags for them when they look through your finances, credit scores, and more. The best thing to do when you are unsure if you qualify is to speak to your loan officer and ask them for their expert opinion as well as any additional advice they have that can help you qualify for a home mortgage. Each of these steps are crucial to help you get pre-approved and secure the loan you need for your dream home so make sure to go over everything in detail with your loan officer!