In today’s stricter lending environment, the processing of a mortgage application is more complex than ever because of the additional steps required by those in the financing business. As a smart buyer, contacting a mortgage lender before shopping will ensure a smoother transaction. By planning ahead you will be in a much better position to negotiate and purchase, avoiding any unpleasant mortgage surprises.
Following these steps will help:
1. EVALUATE AFFORDABILITY. The two most important of which are your monthly mortgage payment and your total debt load relative to your gross income. It is also important to consider additional expenses such as property taxes, insurance, maintenance, association fees and utilities.
2. DISCUSS YOUR OPTIONS. The type of mortgage depends upon your personal, financial and future plans. For example, if your down payment is not large enough to qualify for a conventional loan, perhaps seeking an FHA mortgage or another program offered at the national level would work better. Mortgage programs are always changing so ask your ABR about current options.
3. INTERVIEW LENDERS. Your ABR can recommend several based on past homebuyers’ experiences. While rates and fees are competitive between lenders, other factors may be important. Level of service and how well they have executed transactions in the past and their familiarty with certain mortgage programs over others’.
4 GET PRE-APPROVED. Completing a mortgage application with one or more lenders will help to confirm whether or not to modify your plans. Your pre-approval does not guarantee that you have a mortgage, because it is contingent on the lender receiving full documentation from you. Getting pre-approved is an important first step and puts you in a better negotiating position with sellers.
5. COMMIT TO A LENDER. As soon as you are under contract to purchase a home, commit to working with one lender to complete your mortgage application. You will probably be charged a fee at this point showing that you are serious about a working partnership with them and submitting the required paperwork as quickly as possible.
Following these five steps will improve your outcome of getting a mortgage. Your ABR can provide more detailed information on each step in the process.
Clee Duncan ABR ( Accredited Buyers Resource)