How to Prepare for a Home Mortgage Application
When you need to buy food, the process is pretty simple. You make your grocery list, go to the store, place the things you need in your cart (and maybe a few things you don’t), go up to the cash register, and pay. If only buying a home was as easy as that! Unless you recently won a significant sum in the lottery, most people can’t just buy a home outright. Instead, you have to finance this important purchase with a mortgage.
Take a deep breath — it’s not every day you apply for a loan with that many zeros! But the process is much less intimidating and much more enjoyable if you prepare properly beforehand. After all, once your offer on the home of your dreams is accepted, the clock is ticking-and fast. Closing a mortgage transaction takes about 45 days on average to complete, and entering into the process without the proper information could slow you down.
Here are a few crucial things you should be doing to prepare for applying for a mortgage.
Prepare Your Credit
Part of getting an excellent mortgage rate is having a great credit score. To have the best possible credit score, CNBC recommends the following:
- paying your current bills on time
- paying off as much debt as possible
- keeping your credit card balances low (your debt-to-income ratio will be a significant factor in whether or not you get approved for a mortgage)
- not opening any new lines of credit
- not closing any current open lines of credit
Gather Your Paperwork
According to Fool.com, when applying for a mortgage, you’ll need to provide your chosen lender with specific information about your income and assets. Before you apply, you’ll need to gather your most recent tax return, two months’ worth of pay stubs, two months of bank statements, and a letter from your employer confirming that you do indeed work where you say you work and that your employment is in good standing. These items will determine if you are eligible for a mortgage.
In a housing market as competitive as this, you need to do everything you can to make yourself an attractive candidate for purchasing a home. A large part of that means being prepared before you begin the process of looking for a home and submitting offers. Lack of preparation will drastically slow down the process for you, and you could lose out on homes on your wishlist list. Long story short, take the steps now to apply for a home mortgage!
When preparing your home mortgage application quickly and correctly, John M. Braham Real Estate Agency of Berkshire Hathaway HomeServices has an expansive resume and rock-solid integrity. For more information on how John M. Braham Real Estate Agency can help you, contact the agency today! Follow their Facebook page for helpful hints on navigating the always-changing world of real estate.