Applying for a home mortgage is the very first step that you need to do to make your dream home a reality. However, applying for a home mortgage is not as easy as it seems. It takes a whole lot of time and effort on your part just to get it approved. It may be a daunting task, but all the hassles that you'll go through would be worth getting into your ream home. Mortgage applications are still subject to approval, so how can you increase the changes you get your application approved right away?
Tip No.1: Get All the Necessary Paperwork Ready
The home buyer should prepare all the necessary documents and paperwork that are required for your loan application. Lenders will review these documents when underwriting your mortgage. These documents are proof of how consistently you are paying your bills and other expenses on time. Some of the necessary documents that are needed are tax returns, W-2s, bank statements, documentation of other assets, and documentation regarding your investment accounts. These are all required to prove your financial capacity to pay for your loan.
Tip No.2: File a Lock-in Mortgage Request
Home mortgage rates are very much subject to change, depending on the housing market’s movement. So try to ask your lender if you can have the mortgage rate locked in. That way, you don’t get much of a surprise if mortgage rates suddenly surge upwards. However, if the mortgage rates improve and goes down for a bit, ask your lender if you can have your rate changed to a lower mortgage rate instead. Lenders usually request a fee to lock in your rate. It is advisable that you do it after 30 days of receiving your quote to make sure that you can get the mortgage rate as low as possible.
Tip No.3: Be Open to Other Mortgage Companies
Try to look around and see if other mortgage companies in your area can offer a much better deal. All lenders have different policies and mortgage plans that can better cater to your needs. It would be best to shop around and create a list of all the mortgage companies that you’ve checked so you can compare each of their policies.
Tip No. 4: Check Your Credit Score Before Application
Get your latest credit history from credit bureaus who offer free services for a limited time. Equifax, TransUnion, and Experian offer a 30-day free trial to get your credit score. See if your credit scores are more than 680. Borrowers with the credit score of 580 and above will most likely get their mortgage application approved.
Tip No. 5: Watch Your Spending
Make sure that you don’t overspend and save as much money as you can for your down payment. Mortgage in cities like Birmingham would usually request for a 20 percent down payment.<< Back to the list.
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Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.