Do’s and Don'ts of Mortgage Applications: Tips for a Smooth Process
Do’s and Don'ts of Mortgage Applications: Tips for a Smooth Process
The mortgage process can be stressful. Bank statements, credit scores, interest rates, loan estimates, closing disclosures, and other paperwork can be extremely time-consuming during the home-buying process. Just for you, we have provided a quick list of do’s and don’ts for mortgage applications. We want to help you cut through the clutter and create a quick mortgage process so you can focus on the important stuff: finding your dream house!
Let's Take A Look At The Do’s And Don'ts of Mortgage Applications For A Smooth Process.
Do’s: Go For Pre-Approval Early.
Don'ts: Avoid House Hunting Without First Determining Your Budget.
Early in the home-buying process, you can determine exactly how much house you can afford by getting pre-approved for a mortgage loan. Additionally, a pre-approval letter allows you to make a stronger, more appealing offer because the lender has already confirmed your ability to pay the monthly installment by looking into your income and assets.
Do’s: Consult With Real Estate Experts.
Don'ts: Assume You Must Handle Everything On Your Own.
Do’s: Stick to the Budget.
Don'ts: Overspend.
Make a budget that includes your expenses and savings. This will lessen your financial troubles during tough times. This way, you can pay for your down payment, and your mortgage payments on time, as well as plan for larger purchases, because nobody likes to incur unexpected expenses. Maintaining a budget and keeping track of your spending can help you develop a savings strategy that will guarantee you have enough money to pay off your creditors.
Do’s: Keep A Check On Your Credit History.
Don'ts: Open or Close Credit Lines Without Seeking Professional Advice.
When submitting a mortgage application, it’s a good idea to be aware of your overall credit picture. A free copy of your credit report can be obtained from each of the three main credit reporting agencies. Contact the credit bureau to address any inaccuracies you notice. Be careful not to open new credit lines, close existing ones, co-sign for loans, or make large purchases with credit cards before or during the mortgage loan application process. Regardless of your financial situation, make sure to disclose all liabilities and debts on your mortgage application. It’s always best, to be honest.
Do’s: Maintain Open Lines of Communication.
Don'ts: Take Your Time Replying to Your Loan Team.
Throughout the mortgage application process, your loan officer will contact you. You can speed up the process by responding quickly to the loan officer’s requests for any documents or information. The degree of responsiveness from the borrower is frequently the deciding factor in getting a mortgage approved on time.
Do’s: Create A Savings Plan.
Don'ts: Make No Significant Purchases.
Right now, your money should be saved rather than spent. For things like a down payment, closing costs, or earnest money deposits, you might need to have money on hand. During the application process, avoid making any significant purchases that might affect your credit, like a new car, boat, or set of furniture. Make it a practice to pay your bills on time, as late payments can raise a red flag on a mortgage application.
Do’s: Maintain Your Present EmploymentAnd Source of Income.
Don'ts: Resign or Change Positions.
The key to getting a mortgage is demonstrating stability. If you maintain a steady job and income while avoiding significant changes like quitting your job, the process will go more smoothly. The only exceptions to this rule are getting a pay raise or a promotion, so don’t stress about those! Making changes to your tax returns during the mortgage application process can also cause problems. If you do so, you might require a new loan approval.
Do’s: Keep A Paper Trail.
Don'ts: Place Sizable Bank Deposits (Other ThanYour Paycheck).
Even if you use gift money for down payments and earnest money deposits, mortgage lenders are still required to show proof of your source of funding. Have a thorough paper trail that details the sources of the money that goes into and comes out of your bank accounts. Whenever possible, avoid making large untraceable cash deposits or electronic transfers into your personal banking account. Additionally, if you work for yourself, it’s a good idea to keep your personal and business finances in two different accounts.
Do’s: Maintain Accurate Records.
Don'ts: Be Shocked If More Documents Are Requested.
Mortgage lenders prefer to see proof of your income, your employment status, and your current debts or obligations. This is where having good records—like W2s, tax return paperwork, pay stubs, and bank statements—comes in handy.
Do’s: Ask Questions.
Don'ts: Be Stressed.
Keep in mind that you have the right to ask your mortgage banker or mortgage brokers as many questions as you want. They are there to guide you through the process. Maintain open communication with them, put your trust in their knowledge, and learn all you can about the loan application process. It might turn out to be simpler than you anticipated. Everything Will Be Okay.
Conclusion:
For the mortgage loan application process, abide by these important DOs and DON’Ts. This will guarantee that you qualify for and complete your mortgage loan process. Whether you want to buy your first home, your second home, or even refinance your current mortgage loan, you must go with a trusted and experienced mortgage broker in that area. If you are looking for a mortgage in Surrey, Vancouver, Canada, call the Alpha Mortgage team to discuss your options and begin the process of obtaining your own home.
Alpha Mortgage House Corporation is a Mortgage Broker in Surrey, BC. We provide mortgages for Home Purchases, Project financing, Second mortgages, Commercial mortgages, Mortgages for first-time home buyers and more. Alpha Mortgage is a one-stop solution for all your mortgage needs. Our team works with top lenders to provide you with the best financial options.