It’s a good time to be a homebuyer. If you’re working with a great lender, and if you know what you’re looking for in a mortgage, you’ve got yourself a winning combination that going to be pretty hard to beat.
Even when you’ve found a great lender, that second part of the equation can still be tricky. How do you know what to look for in a mortgage when there are so many options to choose from? Sticking with our best-practice do’s and don’ts, based on our 29 years of experience as a leading lender, can make the process of getting a mortgage much easier.
Do these 6 things before you decide on a mortgage
1. Do keep an eye on your credit.
You’re entitled to a free credit report each year by federal law from one of the top three credit reporting agencies in the U.S. Having a better grasp on your credit score puts you in the driver’s seat. Your credit score can affect your mortgage rate. This can affect your monthly mortgage payment for better or worse. Checking in on your credit annually can give you time to improve your score. Or fix any errors. AnnualCreditReport.com is authorized by federal law to provide a free yearly credit report to the public.
2. Do choose a lender based on reputation.
Real estate is all about location, location, location. And mortgage lenders are all about reputation, reputation, reputation. Checking out your lender’s reputation is one key way to protect yourself from predatory lending practices. Our company, for example, is award-winning and community-driven.
We’ve been giving back through ethical and accessible lending for close to 30 years.
3. Do continue to pay your mortgage or rent on time.
Life happens. But even one 30-day late payment on a credit card or another loan could set you back in your mortgage qualification.
4. Do get prequalified first.
Getting prequalified for a home loan before you start looking around for houses can make it that much easier to nab your dream home when it becomes available. In a nutshell, a home loan prequalification can tell you how much house you can afford before you start shopping.
You can take care of this prequalification in-person, online, or using our free LoanFly app.
5. Do keep track of all your paperwork.
After getting prequalified, your loan officer is going to ask you for several important documents to get the loan process moving. Gather your Social Security Card, work history, employer information, pay stubs, bank statements, and tax returns to avoid scrambling at the last minute.
6. Do notify your loan officer of any big changes in your life.
If you hope to get into a new home without delays, try not to rock the boat for a little while. Changing jobs, moving, and even switching insurance companies are all boat-rocking variables that could delay your mortgage approval and affect interest rates.
Don’t waste your time making these 6 rookie mortgage mistakes
1. Don’t start house hunting before you know what you can afford.
Once again, that’s the beauty of getting prequalified by your lender. It’s quick. It’s easy to do online or via an app. And it’s going to tell you exactly how much you can afford so that you don’t lose valuable time viewing houses out of your price bracket.
2. Don’t take mortgage advice from just anyone.
It’s a bitter pill to swallow. But it’s never a good idea to take your mortgage advice from a friend, a hairdresser, or a neighbor who’s a realtor. You’re making one of the biggest investments of your life. So, get your mortgage information and rate quote straight from the source — your lender. Homebuyers who are better informed, according to a 2015 Fannie Mae report, are more likely to get better financial terms on their mortgage.
Got questions? We’ve got answers. Click here to find a knowledgeable loan officer near you.
3. Don’t make any major purchases.
Remember that thing about not rocking the boat? Buying a new car, appliances, or furniture before signing your home loan contract could impact your financial criteria for qualification.
4. Don’t apply for a new line of credit or loan.
Likewise, taking out a new line of credit or a new loan, whether it’s for a car or education, can change your current financial picture. Changes in your finances may indicate instability and could delay or influence the loan process.
5. Don’t drain your savings.
All that money you saved for a rainy day can go toward your down payment and closing costs. If you have little-to-nothing in savings at the moment, we recommend checking out a big-picture budgeting app like Mint. Any cash you can set aside may help to offset the often-unexpected costs that arise when buying a house.
6. Don’t be a stranger.
There’s no such thing as a stupid question. And there’s no wrong time to reach out to your loan officer. That’s what we’re here for. If you have any questions about your mortgage quote, or if you foresee any life changes coming up, give us a shout. We’re the professionals who can help you troubleshoot, with the goal of reaching your closing day on time.
Looking for a mortgage that fits just right? Start by chatting with one of our loan officers. We can walk you through the do’s and don’ts and save you from wasting time and money on the wrong mortgage.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.