Buying a home is one of the biggest financial transactions people experience in their lives, so it’s no wonder financing is one of the biggest challenges buyers face when shopping for a new home. Even though the finance part of home buying can be stressful, the good news is there are steps you can take to ensure a smoother process and improve your odds of getting approved for your home loan. The first and most important thing is to have a reputable Loan Officer on your side, guiding you through the process. Then…
1. Get Pre-Approved Early
If you want to be ready to make an offer on a home as soon as it hits the market, get pre-approved early in your home search. Having this pre-approval will help you move fast when you find the perfect home. It’s also typically the first thing a real estate agent will ask you for before helping you with your house-hunting journey. So getting it done before talking to an agent will show that you’re serious about buying and ready to start touring homes immediately.
At Bank of England Mortgage Troy, Alex Kandah will take the appropriate steps to check important factors that can make or break the mortgage prior to issuing a pre-approval letter. That way you can have peace of m
2. Get an Underwritten Pre-Approval
If you want to take an extra step and do some work upfront to get your offer to stand out, consider asking your lender for a fully underwritten mortgage pre-approval. This will not only help speed up the mortgage process even more, but it will also show that you are a serious buyer who has been vetted.
During this process, a lender will verify the information in your mortgage application, your income, assets and debts, and send your loan through the underwriting process so that you can quickly get final approval for a loan once you’ve found that perfect home and have an accepted offer. As long as your financial condition and creditworthiness hasn’t changed since you were pre-approved and the home meets other conditions, you’ll be approved for the loan pretty easily.
Doing this work up front will allow you to close quickly once the offer is accepted, opposed to the sometimes-lengthy time frame of these steps. Processing times for a loan are dependent on the time of year but can range from 2 weeks to an average 30+ days. Some lenders can take as long as 60+ days to process your loan but Bank of England Mortgage Troy is well-equipped to close most types of mortgage loans within 30 days with your diligent cooperation in gathering the necessary docs.
Even though getting fully underwritten sounds like more work initially, you’ll have to go through this process in the later stages of the process anyways, so get it out of the way early to save time and help you stand out. This is highly recommended if there are any possible ‘snags’ that could prevent you from qualifying. Talk to your Loan Officer about this if there any concerns.
3. Get Your Credit in Check
One of the most crucial component of getting approved for a home loan is your credit score. Not only does it have a huge financial impact by helping determine your interest rate, but lenders will also use this number to determine if you will be approved for a loan. Getting a firm grasp on how your credit is early in your home search could give you the time you need to improve it, if necessary.
Even if you think your score is good enough, it’s a good idea to get a copy of your credit report and take time to review it for any errors. Sometimes boosting your credit score can be as simple as disputing errors or paying down debt. If you catch issues late, you may not have enough time to correct them before locking in your interest rate and closing. It’s also important not open any additional debts such as credit cards, loans, leases, lines of credit, etc. before or during the mortgage process because that could prevent you from qualifying for the loan.
4. Demonstrate Financial Stability
When lenders assess whether you qualify for a loan, they’re looking to make sure you’ll be able to repay the loan and not default. You can improve your chances of qualifying by demonstrating that you’re financially stable.
Limiting your spending is one of the easier ways to make sure your lender doesn’t find any red flags when reviewing your financial history. Lenders generally don’t like to see any recent big purchases or that you’ve recently missed payments, so make sure your payments are on time.
To help ensure that you aren’t likely to miss mortgage payments, lenders like to see work consistency. Unless relocating or transitioning to a new company in the same field, try not to change jobs during this process as the lender needs to document your income and typically needs a history of receiving that income. Reach out to Alex Kandah if you think a potential career change could affect your qualification.
5. Move Quickly Once Your Offer Is Accepted
Unfortunately, there are a number of ways mortgages can fall through once your offer is accepted. But if you’re able to speed up the loan, inspection and appraisal periods, you might find yourself coming out ahead.
In some markets, the appraisal can take a particularly long time. So, to speed this process up your lender may order the appraisal right after your offer on the home is accepted and you receive the initial loan disclosures. Getting it done quickly may give you time to address any issues without delaying the closing.
Another step you can take to ensure a smooth, speedy process is to schedule your home inspection as soon as your offer is accepted. That way if the inspector finds something wrong, you’ll have time to bring in a specialist to take a look. Your realtor can guide you through this but feel free to reach out to Bank of England Mortgage Troy with any questions or additional guidance.
Best of luck!