Happiness is buying your first home. However one has to go through a lot of hassle buying a new house. Which is why people say that first call a mortgage professional and then a realtor. Because you can’t buy a house before knowing its actual price. But one often gets confused about how much money to spend and how much money to lend. So that’s when a mortgage professional comes to their rescue. However, in order to avoid nasty surprises, we have tried to list some guidelines that can help you speed you through the Mortgage approval process as lenders are not very kind always. So follow the following tips to maximize your chance of getting a loan.
The Pre-Approval Process
It is important to understand that pre-approval and pre-qualified are two different entities. Pre-qualified means a pre-check so as to see if the potential lender can lend you money on the basis of your credit score, monthly debt, additional income etc. Basically, it determines how much of loan can be approved to you. Whereas pre-approval is more of an assurance that you are a good candidate and your loan must be approved. This eventually speeds up the process of home buying. In addition to all this, a pre-approval doesn’t guarantee you the loan amount but it protects you from the higher interest rate. It locks the interest rate that was guaranteed for the pre-approval, which further helps you estimate monthly costs better. They say that the real estate market is strong so whatever help one finds, one must take it as it only helps them to advance in the process of buying a house. So the pre-approval process is one them.
Avoid fluctuations in terms of jobs and position while going through the process of a house mortgage. Lenders like to see stability, they want to give money to someone who has a steady income. Any change in numbers could slow down the process of mortgage approval as new numbers will have to be crunched with respect to your income and debt ratio.
Determine How much you can borrow
It is important to chalk out your budget before you apply for a loan. What happens often is that individuals without understanding their capacity or without taking proper advice borrow more than they can afford and lenders don’t have a problem as long as you can pay it back. They just stick to their rule of thumb that is based on your total housing payments each month. It will be intelligent if you borrow money that is quite a bit less than what a lender approved.
Be “all-in” with document requests
You must be ready with all the necessary documents to approve your loan. Ask your lenders, or mortgage professional beforehand about all the required documents, give them every page of every anything they ask you for. The whole process of mortgage approval is document-centric so even if your lender didn’t pay heed to it, you must be ready with it in advance. Collecting documents ahead of time will keep you ahead of the process and help you make the deal easily.
Clean your mess and tie the loose ends when you find one
Every mortgage approval process comes with terms and condition. Even if it is a copy of canceled down payment check or evidence of your homeowner’s insurance. So don’t let such petty issues come between you and your homeownership. Like they say it’s not how you start the race but how you cross the finish line that matters, so have patience and get all the documents and information needed.
Lastly, if you are able to follow these tips then your mortgage approval process will not only get approved you will also be able to skip a lot of drama. This will also help you help others who are stuck up in their process. So make the most of these tips and win yourself the homeownership trophy.