2020 was a record-breaking year for the US housing market. Over 800,000 new homes were sold around the country! That figure, according to the same source, was almost 20% higher than the previous year’s total.
Clearly, people are entering the wonderful world of homeownership at an impressive rate right now. They’re packing up their possessions, transporting them to new neighborhoods, and creating a new life for themselves in the process. It’s an exciting time!
But it also comes with various trials and tribulations. And the dreaded mortgage process sits right at the top of that list. With countless providers to choose between, huge amounts of paperwork to complete, and complicated financial matters to think through, home loans are notoriously tricky to wrap your head around.
Know the struggle and want some help? You’re in the right place. Keep reading to discover the top do’s and don’ts of the mortgage application process.
The mortgage loan process can feel daunting when you navigate it for the first time. With countless things to think about, the whole shebang can seem overwhelming and uncertain! Thankfully, a few tips and tricks can make a big difference.
Keep the following ‘do’s’ in mind and the whole experience should proceed with greater ease.
Check Your Credit Score
A good starting point is to check your credit score. This does two things: 1) it’ll reveal the score on which lenders will base their decision and 2) it’ll help you identify any mistakes on your credit report. From there, you can take steps to remedy those issues and improve your chance of mortgage acceptance as a result.
There’s no shortage of home mortgage loan options nowadays. But regardless of which type you pursue, it’s always important to go through the mortgage pre-approval process first. This will reveal exactly how much you can afford to spend on a property.
Deciding against pre-approval is like going shopping without knowing how much money’s in your account. It puts a question mark over whether or not you can pay for whatever’s in your basket (in this case, a house).
Buying a house isn’t cheap, which means you need to start saving money ASAP. You need to have enough cash in the bank to handle everything from the down-payment to closing costs. If you don’t already have enough, then we highly recommend making this a priority.
Speed things along by cutting back your expenses, selling anything you no longer need and canceling unused subscriptions. You could even downgrade your vehicle, smartphone plan, and so on. Do whatever you can to get the funds available and you’re sure to enjoy a less stressful experience of securing the home loan.
It might be tempting to save some cash and approach the mortgage approval process with a DIY mentality. However, you’ll enjoy a much easier time if you seek help from the professionals! Getting a mortgage isn’t easy, which makes the support of home inspectors, realtors, and loan officers somewhat priceless.
They’ll be able to answer your questions and hold your hand every step of the way. They’ll coach you through it and be a shoulder to lean on if/when you need one.
Getting a mortgage doesn’t have to be difficult. But, trust us, it’ll be ten times harder if you make certain mistakes along the way. Check out the following ‘don’ts’ of the mortgage process (and avoid them at all costs) if want to avoid that fate.
Leave No Paper Trail
To grant your home loan, the lender needs to look through your bank account and see a clear, consistent paper trail in relation to your income. It should be stable, consistent, and obvious from where it’s coming!
Avoid making large cash payments into your account other than your typical salary. Anything unusual or that can’t be accounted for could work against you.
Quit Your Job
Now’s not the time to quit or change your job! The real secret to success when it comes to securing your home loan is stability. If you lose your job or your income changes, then your application could be denied or you may need new loan approval.
Don’t sweat it if you get promoted or awarded a raise though. It’s only the downward shift that we’re worried about here.
Dilly Dally or Delay
Most homeowners want the mortgage process to be over fast. After all, this is what’s stopping them from getting into their new house.
In the interest of speeding everything up, then, make it your mission to a) respond to all official communications ASAP and b) fulfill your requirements without delay. Remember, the longer you wait, the longer the whole experience will take.
Compromise Your Current Credit Score
Protect your credit score with your life! Okay, not literally. But you should strive to safeguard your credit rating until the mortgage process is over.
Things like late bill payments, big purchases, and new credit cards can all impinge upon your credit. And that, in turn, could make the mortgage lender less willing to consider your application. Of course, if you’re with poor credit, then it makes sense to take action to remedy that situation.
Remember the Do’s and Don’ts of the Mortgage Process
Huge numbers of hardworking Americans move home every year. However, that doesn’t make it easy! Buying a house is a long, stressful, and expensive endeavor that can be difficult to navigate- especially when you’ve never done it before.
Of the many potential obstacles that prospective buyers have to overcome, though, few are more complicated than the mortgage process. This key step is riddled with complexity and things to think through. With any luck, though, the do’s and don’ts in this article will help.
Keep them in mind and you should be one step closer to securing your home loan in no time. Would you like to read more articles like this one? Search ‘mortgage’ on the website now.