Get Your Mortgage Process Moving Full Steam Ahead!

You’ve found the home of your dreams, and put in an offer that was accepted by the seller. Congratulations! But now comes another challenge – getting approved for a mortgage to finance your new place. The process doesn’t have to be a daunting one, especially if you make some good choices and work with a good lender.

Take the following advice to ensure your mortgage process doesn’t hit any speed bumps.

Include Every Bitty Piece of Documentation

Before approving you for a mortgage loan, your lender is going to need a few pertinent documents to get an accurate sense of your financial profile. So make sure that you provide details of your finances in the form of pay stubs, tax returns, asset account statements, business financial statements (if you’re self-employed), and a paper trail for deposits and withdrawals over $1,000.

Even if a single page of any document is missing, it can put a wrench in the mortgage approval process.

Share All Home Offer Details With the Lender

Don’t hide anything from your lender if it can help move the mortgage approval process along. The offer that you draft up on a house will need specific milestone dates, such as how many days you have to get approved for a loan, and how many days it takes to close it.

Missing these dates in the purchase contract can put you in a risky position of losing your deposit. Your lender absolutely needs these critical pieces of information in order to execute the mortgage process, so do them – and yourself – a favor and make sure these pieces of information are included in your contract.

Be Realistic About Mortgage Rates

The interest rate attached to the mortgage loan you need to finance your new home will have a huge impact on how much you’ll be paying every month towards your mortgage. After a seller accepts your offer, you’re in a contract and are now ready to lock in a specific rate on your mortgage loan. You’ve got to be in contract first before locking in your mortgage because the rate lock runs with both the borrower and the property.

What does this really mean for you? While you’re in contract, the length of time of the rate lock will affect the rate – a shorter lock (such as 30 days) has a lower rate than a longer one (such as 90 days).

Make sure to ask your lender to quote any rate locks according to your closing timeline. Timing is everything when it comes to rate locks. Keeping tabs on the market is helpful to give you an idea of the rate range you might end up with. But at the end of the day, you’ll be locking in at a rate at the market levels when you enter into your contract.

Understand the Difference Between Pre-Approval and Approval

It’s typically recommended to get pre-approved for a mortgage before taking the first step towards looking for a new home. This gives you a clear idea of what you can afford so you can narrow your choices when house-hunting.

But there’s a difference between a pre-approval and an actual approval. You shouldn’t always assume that you’ll be approved for a mortgage just because you took the step to get pre-approved. A “pre-approval” simply means that your lender considers you to have a healthy financial profile.

But you still need to get the underwriting approved by getting a commitment to a mortgage loan in writing. Once your file and purchase agreement are sent over to an underwriter, the loan will (hopefully) arrive.

 

Avoid ‘Bad Behavior’ When it Comes to Financial Decisions Made During the Mortgage Process

There are certain things you should absolutely avoid doing between the date you apply for a mortgage, and the date of your actual funding. For instance, you’d be well-advised not to open new credit cards, even if the rate incentive is pretty tempting. You also should wait to buy a new vehicle or trade up to a larger lease, as this will just be added to your debt. And do NOT forget to pay your bills – this is an act that should always be avoided, regardless if you’re in the middle of a mortgage approval process or not.

There are bunch of things you can do to prevent any curveballs being thrown into your mortgage approval process. Your lender and real estate agent will be able to guide you throughout the journey to make sure you do everything right. Take their advice into serious consideration in order to boost your chances of having ‘APPROVED’ stamped on your mortgage loan application.