Streamline the Mortgage ProcessFew things are more exciting than signing a contract to purchase a home. After the excitement dies down, though, many homeowners are often discouraged by the complexity of the mortgage application process.

But applying for a mortgage doesn’t have to be a complicated and cumbersome process. These five steps can help the mortgage application process run smoother, faster, and more efficiently.

1. Know your credit score. Your credit score is the most important factor in determining what type of mortgage you may qualify for and what your interest rate will be, so it’s something you should obtain early in the process. In general, an ideal score is anything above 680, while a score below 620 may result in higher interest rates and tougher loan programs. But don’t fret, there are loads of programs for the credit challenged borrowers.

 

2. Prepare the paperwork and other necessary documentation. When you meet with your mortgage loan officer, you’ll typically need to bring the following:

  • Copies of your past three months’ bank statements and, ideally, statements for any other assets you own. Make sure you copy both sides of ALL pages of the statements.
  • Pay stubs for the past 30 days of employment.
  • Most recent two years’ W-2 forms.
  • Your driver’s license.
  • If you are self employed, a copy of your entire tax return for the past two years.
  • A copy of the purchase contract.

Remember that you will need all of these documents unless you’re looking for a stated program where no income documentation is required. There are many loan programs that require only a copy of your drivers license, purchase contract, and a simple application.

3. Provide the lender with any contract changes or addenda. It is not uncommon for changes to be made to the contract after it is signed by both parties - after the inspection, for example, when the seller may agree to make certain repairs or price concessions. The lender needs to receive these changes or addendum as quickly as possible to avoid potential delays.

4. Make sure the appraiser has access to the home. One of the first things the lender will do is order an appraisal on the home. Work with the seller or seller’s agent, to make sure the appriaser can get into the home on the day the appraisal is scheduled. This is a common source of delays in the mortgage application process, since the loan cannot be submitted for final approval without the appraisal.

5. Know how your employment status and income affect the application. If you are a W-2 employee and receive a regular wage, you need to provide evidence of two years; present and/or previous employment. Note that if commisions or bonuses will be included in your income, your lender will need to know this, as they can be counted differently for the purpose of qualifying for a certain mortgage amount. In this case, the previous two years; tax returns are usually required.

If you have any questions don’t hesitate to write a comment and I will do my best to reply within a day or two.

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