The mortgage process is notorious for being stressful, but the housing market moves fast and it’s important to work with a lender that can keep up. Interest rates fluctuate, credit scores rise and fall, loan estimates, closing disclosures, and more can make finding your dream home more difficult than it needs to be. We aim to change that! We’ve put together a list of the Dos and Don’ts to better help you along the way to finding your dream home!
DO: Get Help from Homebuying Professionals
DON’T: Take on the Burden by Yourself
There are many moving parts to the homebuying process. This is where Loan Officers, Real Estate Agents, and Loan Processors come in to act as your guides. They ensure all loan requirements are met, and that important documentation is completed each step of the way. They work with other key players in the process such as Transaction Coordinators and Escrow Officers. Each role requires a unique set of skills and experience needed to help you get from start to finish as effortlessly and smoothly as possible.
DO: Get Pre-Approved for a Mortgage Early
DON’T: Look for A Home Without Knowing How Much You Can Afford
Getting pre-approved for a mortgage loan at the start of your homebuying process is the easiest way to find out how much you can afford. This process starts by completing a mortgage application and providing documentation to your lender, who will review the documents, pull your credit, and asses your current financial situation. In addition, with a pre-approval letter your offer will look better to the seller since you have been deemed qualified by your lender. Learn more about getting pre-approved.
DO: Getting to Know Your Credit
DON’T: Open or Close Credit Lines
You’ll want to look at your credit reports as they are now, you can start by going to AnnualCreditReport.com to check your credit report for free once a year. Work on resolving outstanding issues and/or errors as these will affect your mortgage approval. Try your best to avoid opening new credit as well as closing existing accounts as they help provide credit history. Payment history has the largest impact on your credit score so pay your bills on time and work on paying down your credit card balances. It’s always a good idea to learn more about improving your credit score.
DO: Prepare a Savings Plan
DON’T: Make Large Unplanned Purchases
Having a savings plan is crucial to ensure your financial goals are met. Take into consideration that you will need the funds for things like an earnest money deposit, down payment, closing costs and or other planned purchases. Do your best to avoid applying for more loans such as a car loan as these can negatively impact your credit rating. If you can’t avoid a large expense, make sure you include it in your savings plan in order to work around it and make the necessary payments on time.
DO: Maintain Your Current Employment and Income
DON’T: Make Drastic Changes to Your Employment Status
Ensuring that you have a stable source of income is crucial to the mortgage process. Stability is important to your lender because if you can’t show that you have stable income, you may be viewed as “high risk” when it comes to making your mortgage payments, and that could result in being denied for your home loan. The exception to this would be if you have a positive employment change, such as being promoted or taking a new job with higher pay than your current position.
DO: Maintain a Paper Trail
DON’T: Make Large Deposits (Other Than Your Paycheck)
Keep documentation regarding any income or lifestyle changes. Mortgage lenders are required to document the source of funds being used for your home mortgage. By maintaining this documentation, it helps you and your lender by providing an easy-to-follow paper trail showing how money is coming in and out of your bank accounts, and where it’s coming from. If you’re self-employed, it may be a good idea to keep your business funds separate from your personal funds.
DO: Ask Questions
DON’T: Try to Learn Everything on Your Own
Communication is key to the mortgage process. At Warp Speed Mortgage we are determined to help you every step of the way. Do you have questions? Feel free to call us at (877) 707-2050, visit our website or email us at hello@warpspeedmortgage.com.
Helping you to understand the mortgage process is just the beginning and Warp Speed Mortgage is a great place to start! Get started by Viewing Today’s Mortgage Interest Rates!
