A mortgage loan approval may be the only thing standing between you and the keys to your new home. But, the thought of a complicated application process that involves mountains of paperwork and strict qualification requirements makes you break out in a cold sweat. While there are indeed documentation, income, and credit requirements that factor into a mortgage loan approval, there are several actions you can take before submitting your mortgage application that will simplify the process.
Follow these steps to help simplify the mortgage application process.
Check your credit for potential issues.
Your credit history can make your dream home affordable or put it just out of reach. The way you’ve managed your credit obligations over the years can influence your eligibility for specific mortgage loan programs. Lenders may review both your credit history report and credit score before approving or denying an application.
A credit score is a three-digit numerical summary of your credit history report. Generally, higher credit scores open the doors to more favorable mortgage rates and repayment terms. Low credit scores may still garner a loan approval, but often require a larger down payment or come with a less than desirable interest rate.
Review your credit history reports before you apply for a mortgage, then take the time to resolve potential issues before you start the home buying process. Request a free copy of each of your three reports at AnnualCreditReport.com. Resolve any errors in the reports by following the dispute policy of the credit reporting bureau. Continue to make on-time payments during the dispute resolution process since late or delinquent payments can cause serious damage to your credit score.
If you’re worried that checking your own credit will hurt your score, don’t be. There are two types of credit report inquiries: hard and soft. A hard inquiry happens when you apply for credit and the creditor reviews your file as part of their normal decision-making process. Hard inquiries appear on your credit history report and impact your credit score. A soft inquiry includes those instances when you check your own credit. Soft inquiries aren’t reflected in your credit history report and don’t impact your credit score.
Complete a Traditions Mortgage Pre-Approval Application.
Before you tour another open house, complete a mortgage loan pre-approval. The results will indicate the maximum loan amount you might qualify for and can help you settle on a realistic price range for your next home. Partner with Traditions Mortgage for personalized Pre-Approval loan application assistance. An experienced lending professional can explain the results of your application and tailor a mortgage loan that makes sense for your finances. A real estate agent may use your mortgage loan pre-approval to negotiate the purchase of your new home.
Then, when you’re ready to apply for a mortgage, use a Mortgage Application Checklist to reduce feelings of being overwhelmed and to quickly get the required paperwork in order.
Interview more than one real estate agent.
Find a trustworthy real estate partner who understands your needs and the local market. They can use your search criteria and mortgage loan pre-approval results to find the home of your dreams. Since buying a home is one of the most significant purchases of your life, the person you choose to assist you on your shopping journey needs to be a good match. Spend adequate time screening potential agents to avoid working with someone who doesn’t listen to your search requirements, pressures you to make an offer when you’re unsure, or who fails to set realistic expectations.
Create a list of questions to help narrow your selection. Some might include:
- How long have you been an agent?
- Can you provide references?
- How many transactions have you completed in my preferred community or neighborhood?
- Do you recommend buyers obtain a mortgage loan pre-approval? Why or why not?
Speak with several real estate agents before making a final decision.
Our expert lending professionals are here to make the mortgage loan application process as stress-free and straightforward as possible while ensuring you receive financing based on your needs. Contact Traditions Mortgage today to simplify the mortgage application process and learn more about your financing options.