First Step: Make Sure Your Finances Are In Order

To begin your mortgage application process, ensure that all of your finances are in good standing. If you have any outstanding debts that have been sent to collections under your name, pay them off first before proceeding with the application. This is necessary because these debts must be settled before closing any credit collection agencies associated with your mortgage.

To improve your chances of getting approved for a mortgage, some lenders may ask for a letter from the people you owe money to indicating that you have paid off the debts. If you still have these debts when you apply for the mortgage, it is advisable to pay them off, even if they are in collections, at least a month prior to the application process. This will ensure that your debt payments and clearance are accurately reflected in your credit score check.

Before starting the application process, make sure to check your credit score to avoid any delays in the approval process. You can check it for free online or by calling automated phone services provided by many providers. A credit score of around 700 or higher is recommended as it shows lenders that you are a dependable borrower.

Before and during your mortgage application, it is important to stay on top of your finances. This includes paying your credit debts, credit fees, and bills on time. Additionally, make sure your financial documents such as pay stubs, W-2s from the last two years, and bank account statements are organized and ready for submission to ensure a loan approval.

You will also need to collect statements from any other savings, investment, or retirement accounts you may have. It is important to remember to gather your personal identification documents when collecting financial documents, such as your social security card and a valid form of identification.

Second Step: Make Sure Your Have Saved And Accounted For Fees And Down Payments

To get approved for a mortgage, you will need to pay certain fees, including an earnest money deposit. This deposit is paid to the seller to show that you are serious about purchasing the property. The typical amount of earnest money deposit is between $500 to $1000 for homes under $500,000, but for more expensive homes, the deposit can be as high as $5,000 to $10,000.

When you close on a mortgage, there are additional costs and fees known as Closing Costs/Fees. These usually amount to 2-5% of the total cost of the home. Be sure to consider these expenses and plan accordingly when budgeting for your new home.

It is important to consider making a sizable down payment when applying for a mortgage. This will increase your chances of getting approved faster and with less difficulty. Additionally, the funds will be applied directly to your mortgage, so consider it as paying now to save later. While a down payment is not always required, especially for less expensive homes, making a payment of at least 20% can expedite the approval process for your mortgage.

Third Step: Obtian A Pre-Approval Letter

It is important to get a pre-approval letter, most real estate agents will want to have one in hand before showing homes to potential buyers. The purpose of preapproval is to verify that you have the ability to buy a home before going through the long process of searching for the right one. Having preapproval can save you time and help you establish your budget and search parameters.

Fourth Step: Negotiate With The Seller In A Timely Manner

During the home buying process, buyers and sellers engage in negotiations where they discuss various factors before reaching the closing table. Negotiations may continue to evolve as new information is considered.

During standard home inspections, some points of negotiation may arise based on the information discovered. This can actually benefit the buyer because revealing necessary repairs can reduce the cost of the home. While negotiations can continue until the closing process is finalized, it is advisable to reach an agreement or compromise with the seller as soon as possible if you want to expedite the approval process.

Fifth Step: Schedule Appraisals And Inspections As Soon As Possible

In order for lenders to approve a buyer’s home purchase, inspections, and appraisals are necessary. These tests are crucial for negotiating with lenders and sellers. It’s important to schedule all required inspections well in advance of the closing date.

Sixth Step: Avoid Making Any Substantial Life Changes

To ensure a smooth mortgage process, it’s recommended that you avoid making significant changes to your finances and lifestyle. This includes things like changing jobs, moving, buying expensive items that require loans or credit checks (such as cars or boats), or adopting children.

It is important to note that your banks or creditors may become aware of certain financial activities, such as applying for credit cards, bouncing checks, changing banks, transferring large amounts of money between bank accounts, or making significant deposits into your bank accounts.

Final Step: Maintain Good Communication With Everyone Involved

The process of buying a home and obtaining a mortgage can be complex and involve many steps and obstacles. There are numerous factors to consider, some of which may be beyond your control. However, one way to minimize potential issues is by maintaining clear communication throughout the process.

To prioritize a speedy mortgage approval in your home buying process, prepare your finances beforehand, determine your negotiation points ahead of time, and be willing to compromise. Keep communication open throughout the process and, if needed, consider working with an independent mortgage broker who can guide you through the entire process and serve as your main point of contact.

Get The Mortgage That’s Right For You

If you’re looking for the best reverse mortgage lender in town, be sure to do your homework first. At Sword Mortgage, we believe that an informed customer is the best kind of customer. Therefore, our loan officers will take the time to fully explain your options and help you understand all aspects of your unique situation before making a decision. Call 770-826-0222 to speak to a mortgage professional or get started on your loan application process today.