A Millennial' Guide to Home Mortgage Application

Making your dream house into a reality is not easy. For the average American, the only way to get a house is to apply for a home mortgage. But applying for one can be very complicated. It takes a lot of time and effort just to submit the required documents just to end up having your application rejected. Here are some tips to help prevent your efforts from being wasted.

Millennial Tip No.1: Do Your Homework

You need to do your research if you really want to apply for a loan. You need to have all the documents and even the paperwork ready before you try to apply for a home loan. Preparing these documents can take a lot of time. So gathering up all the needed paperwork and documents will decrease your loan application’s processing time. Some important documents that you need to submit are tax returns, bank statements, W-2s, investment accounts and other documentation of your current assets and liabilities.

Millennial Tip No.2: Consider Filing a Lock-in Mortgage Request

Home mortgage interest rates change over time and are determined by the housing market. Requesting for an interest rate lock-in can help you save a lot of money in the long run. Try asking your lender about it and see if its available for you. Keep in mind that a mortgage rate can suddenly spike up when you least expect it. So try to ask your lender about it. However, if the mortgage interest rates go down for a bit; you may also want to ask your lender if you can remove the lock-in request instead. Lenders would usually approve these requests, but they do charge a premium for it. That's why some brokers often tell their clients to just request for a lock-in 30 days after they filed for a home mortgage to get better chances of getting the lowest interest rate possible.

Millennial Tip No.3: Keep an Open Mind About Other Lenders

It doesn't really hurt to look around for other mortgage companies. In fact, this helps you a lot especially when making your decisions. There are other mortgage lenders that have different mortgage plans and even policies that might better fit with your financial situation.  

Millennial Tip No.4: Check Your Credit Score

Get a copy of your credit history several months before you apply for a mortgage. Some credit bureaus actually offer free services for a limited time only. Credit bureaus such as Experian, TransUnion, and Equifax are just some that offers a 30-day free trial on their official websites. Make sure that your credit score is around 640 to increase your chances of getting your home mortgage application approved.