How To Prepare For Property Mortgage Process

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Preparation is key to navigating today's housing market. The home loan application process begins with determining what you can realistically afford, gathering the necessary documents as outlined by your lender and familiarizing yourself with the fundamentals of the home loan process, interest rates, loan terms and additional fees associated with buying a home.

   Getting ready to begin the mortgage process? You’ll likely want to get started by getting pre-approved. Being pre-approved for a home loan is beneficial in several ways. It gives you a solid idea of what you can afford, thereby helping you narrow down your home search, and it shows sellers that you’ve already taken the necessary steps to secure financing, which makes you a stronger buyer. But how can you best prepare for mortgage process? Simply follow the steps below and you’ll be well-prepared.

 1.GATHER DOCUMENTS


Your mortgage lender needs certain paperwork/documents in order to evaluate your creditworthiness and determine how much money their institution is able to lend to you. 

2. PREPARE QUESTIONS

Create a list of questions you want to ask your mortgage lender and real estate agent when you meet with them for interviews. If you’re not sure which questions you should ask, take a look at some of the points on this page. You’ll want to know may include…
  • Whether you’re working with a direct lender or a broker
  • If your lender/broker can accommodate your special financing needs, i.e. low credit, low down payment, etc.
  • What are the total costs of the loans you’re considering, including the interest rate, broker fees (if any), points (if any), prepayment penalties, application fees, credit report fee, appraisal fee, etc.                                                                            

3. UNDERSTAND YOUR FINANCIAL SITUATION

Do the math to determine what you can comfortably borrow vs. what you are eligible to borrow. Remember, just because you may be pre-approved for a certain amount doesn’t necessarily mean you should borrow that much. For example, you may be pre-approved for 20 million when in reality; you may be better off spending closer to 17 million. The amount of money you are pre-approved for is an indication of how much money the lending institution is willing to let you borrow — and while it can certainly help you narrow down your home search by eliminating any properties that are priced above your pre-approval amount, it may not be a good reflection of what you should actually spend on a home. Knowing this ahead of time will help you avoid financial stress down the road.

4. COMMUNICATE WITH YOUR BROKER OFTEN

Once you have prepared yourself for mortgage process, talk to your loan officer/broker about setting up a time to meet and discuss getting pre-approved. Be sure to have your documents ready as well as your list of questions. After your initial meeting, your lender/broker should follow up with you to take the next steps or address any questions or concerns you may have. If you have questions or concerns that they have not yet addressed or that you thought of after your meeting don’t hesitate to be the one to reach out to them.

     Communication is a huge component of a successful mortgage transaction, and since it is likely to be one of the biggest financial transactions you’ll make in your life, communicating clearly and often is key!
Want to be fully prepared to meet with an Mortgage advisor near you, here is a partial list of what you can gather in advance before meeting with your mortgage advisor:
Here are some of the documents you may be asked for when you want to get a loan:
  • 2 months of most current asset statements for all accounts, including blank pages
  • 2 years W2’s
  • 2 years Federal tax returns with all schedules
  • Recent (30 days) paystubs
  • Most recent statements for retirement account
  • Copy of Driver’s License or other proof of identity
  • YTD Profit and Loss statement for self-employed borrowers
  • Mortgage statement for all properties owned
  • Homeowner Insurance for all properties owned
There are many things that can go wrong in the mortgage process, you’ll be better prepared to find a home and have a stronger position during negotiations. Being pre-approved means you’ll be able to focus on homes for sale in your price range. Plus, you’ll be more aware of your overall financial capacity, and more likely to put an offer on a home that fits your lifestyle and your means.

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