The mortgage process can be stressful… we know. Especially as a first-time home buyer, going into the loan process for the very first time can be daunting and full of unknowns. That is why we’re offering a quick list of do’s and don’ts to help cut through the noise and create a smooth mortgage process so you can focus on the enjoyment that comes with finding your new home!
Get Pre-Approved Early
The last thing you want is to spend a lot of time going to showings of multiple homes and finding your dream home only to realize it’s out of your budget. Your time could be better spent if you know your exact pre-approval amount so you can avoid an unnecessary heartbreak. Additionally, you can make a stronger and more competitive offer with a pre-approval letter since a lender has already verified your income and assets to make sure you can make the monthly mortgage payment.
Understand Your Credit
Your credit score plays a big part in getting a mortgage, so making sure you understand your score can help you qualify for a lower interest rate, and ultimately a higher loan amount. It’s a good idea to review your credit report and if you see something that’s reported inaccurately to get it fixed before applying for a home loan.
Maintain Your Employment & Income
One of the largest do’s of getting a mortgage is to maintain your employment and income throughout the loan process. The lender wants to see that you have a stable job history, preferably over the last two years, and that you work a consistent full time job. If you change your job before closing, you may need to start over with a new loan approval. This will likely set back your closing date as well since you’d be taking a few steps back in the process.
As a borrower it’s important that you are answering the lender’s questions within a day or two. Once the lender asks for documents, it’s in your best interest to get those documents to your lender as quickly as possible to stay on track. If it takes you a week or two to submit documents, you’re risking your closing date being delayed.
Make Major Purchases Before Closing
You’d be surprised how many borrowers think that once they get receive the clear to close from the underwriter that they can open new credit lines for furniture, cars, etc. before funding. We always suggest waiting until your loan has funded to open these new credit lines. The reason is because the lender gets flagged with an alert anytime new credit is established before the loan is funded, and if you are someone who is on the edge for credit score, this could push you into the zone where you don’t qualify for your loan anymore. If you need an exception, always talk with your lender before and they can guide you through the best options.
Plan a Long Vacation During The Loan Process
Like it was mentioned before, fast communication between the borrower and lender is crucial to make it to closing on time. With a long vacation in the middle of the loan process, you risk missing important emails/phone calls where a response is needed.
Make Large Bank Deposits
Lenders are required to document where your funds come from for earnest money and down payments. Avoid making large deposits in your accounts that can’t be accounted for. As a rule of thumb, it’s always advised to have a clear paper trail showing how money is coming in and out of your bank account to avoid further investigation by the lender.
You have a team of loan professionals working with you to make sure you get into your dream home. Your lender wants you to feel knowledgeable and confident about the mortgage process. Trust their expertise, ask questions as they arise, and embrace the loan journey! We hope you find that it’s less difficult than you imagined.