5 Tips For a Smooth Mortgage Application Process
It could take up to two months to complete your mortgage application approved. The fastest has been three days. Do not expect to get through the mortgage application process that fast.
By following the 5 tips below you will move through the process smoother and approved faster.
1. Prepare a File
Start by creating a checklist of the required items you need to gather for your application. The goal is to stay organized in your mortgage application process.
Create a hard copy version of your application process. Once you have a hard copy version, create an electronic version for easy recording and transmission.
Gather your two most recent tax returns and w2s. Save your two most recent statements for assets that will be used as the downpayment and for closing costs.
Continue to add the new statements as you receive them.
Create a list of your employers for at least the two previous years. Many lenders may ask for further back. Include recent pay stubs from your current or most recent employer.
Include documents related to divorces, child support, and credit-changing related situations.
2. Call the Appraiser Back and Make an Appointment Asap
Making an appointment with an appraiser can take up to a week or even longer. The appraiser will look at your home, research your home, and prepare a report for you and the lender.
The appraiser will estimate the property’s value. The mortgage lender will require an appraisal of the property because it is the underlying collateral for your loan.
3. Try to Avoid Opening Any New Liabilities After You Begin Your Application
Do not open new accounts or apply for new credit while you are in the mortgage application process.
New credit cards and auto loans would fall into this category.
A lender will determine your debt-to-income ratio in determining your loan eligibility. By applying for new credit you are changing your ratio.
A lender will have to review the ratio again taking into account the new debt. This will delay the process and could make you ineligible for your loan.
4. Pay Your Bills on Time
Your credit is the most important element of your application. Lenders will often check your credit before they begin to process your application.
Be prepared for a lender to check your credit again at the end of the application process. The lender is confirming your credit has remained clean and steady throughout the course of the application.
Your credit score dropping could increase your rate, or make you ineligible for a loan.
5. Respond Quickly
Respond to your lender or agent in a timely manner. They are there to help you, so make their job easier.
Occasionally they will ask for additional documentation or information. This means they cannot move forward until you provide the needed pieces.
Your underwriter asks for additional documentation. Your mortgage application process will not move forward without it.
Complete Your Mortgage Application Process
Once you decide you are going to apply for a mortgage prepare your file in paper and electronic versions. Call and make an appointment with the appraiser.
Don’t rock the boat with your current credit situation. Avoid new debt and pay your bills on time. By following these 5 tips you will have a smooth application process.
Start your mortgage application with these 7 documents you need.