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5 little known facts that can affect your new mortgage

By
Real Estate Agent with HomeSmart SA643346000

5 little known facts that affect your mortgage So there you are, anticipating the purchase of your new home.  You have scoured the neighborhoods, checked out the schools and churches, routed and rerouted your commute to work, and you even know where the closest Pizza joint is. But, if you have not taken the steps necessary to secure financing for the new home, and the steps to maintain that loan approval all the way through to close of escrow, your dreams will shatter and you will find yourself all packed up wiuth nowhere to go.

So, what can you do to ensure that you have financing in place to close the deal?  Here are five pieces of a winning strategy that will help insure you obtain the mortgage you need.

#1 Conquer your credit.

Having good credit is beneficial for so many reasons. Of course, you’ll need to meet a lender’s credit standards in order to even qualify for financing but beyond that, you’re more likely to get a competitive rate and term offers with a higher credit score.

A clean credit report will also assist you in moving faster through the application and underwriting process. For example, a history of late payments, a bankruptcy, or other financial speed bumps can set off alarm bells.

 

Loan applications with blatant blemishes will trigger additional scrutiny, which often means requests for additional documentation from you. That back-and-forth process can eat into the calendar.

 

Knowing your credit rating beforehand can help prepare you in the mortgage approval process. It’s important to pull your credit reports and credit scores on a regular basis to stay on top of what is happening.

#2 Find the right lender.

Not all mortgages are created equal, especially more specialized products like government-backed VA and USDA home loans. But thousands of lenders and loan officers have plenty of experience with all loan types.

 

The challenge for you is to find the right combination of experience, customer service and speed. You should ask prospective lenders about their turnaround times on loan files. Do they have underwriters in-house? What’s the average number of days from contract to close?

 

Consider a company’s expertise if you’re seeking a VA loan, an FHA 203k loan or any other more specialized mortgage. There are no guarantees, but sometimes that experience can translate into a speedier and more streamlined process.

When I work with my clients, I have a team in place to meet all of their needs.  I have partnered with several lenders in the South East Valley, any of which can assist you.

#3 Be Responsive.

Time is of the essence in the Real Estate world. This means that per the contract, certain things need to occur, deadlines met, paperwork filed, all in a timely manner.

You’ll be asked to supply information and documentation throughout the loan process to your Loan Officer. Gather together your tax returns, bank statements, pay stubs and other financial information before you even seek loan prequalification. Having all of that information on hand at the onset will help your Loan Officer expedite the process.

When additional questions come up, and they will, during the underwriting stage, you will need to act quickly to provide the necessary information. You can’t complain about delays and a more drawn-out process when the loan officer is waiting on you to provide information.

Too many deals have fallen apart because one of the parties failed to see the urgency involved with the time lines.

#4 Buy a house that meets all the requirements of your loan.

Government-backed programs like FHA and VA loans have property standards and requirements that need to be met. Homes that present problems may need corrective action before the loan can close, which can lead to delays.

This is where a good real estate agent can make a world of difference. The last thing you want to do is get under contract on a home that has little chance of a successful appraisal. That can waste both time and money.  If the loan is unable to fund, you will find yourself right back at square one starting over.

And lastly, and quite possibly most importantly:

#5 Dont take on new credit.

Don’t apply for new credit or make any large purchases during the loan process. Any changes to your financial and credit profile will raise eyebrows among underwriters. Lenders crave stability and reliability.

Racking up new credit card debt or moving around money can utterly derail your loan application, not just delay it.  Resist the temptation to go buy all of that new furniture for the house, or celebrate the new home purchase with a new car purchase.  These things WILL affect your credit score and often times just enough to knock you out of qualifying for the loan.

Dont sink your home ownership dreams when you are in the final stretch and the end is in sight.  Hold off on any large purchase and additional credit as the lender will pull your credit file once more, just prior to close, and you could lose the deal at the closing table.  Not fun!

Adhering to these 5 little known facts that can affect your new mortgage during your home buying process will make the experience much more smooth and enjoyable and put you on the right track to fulfilling your dreams.

If you or anyone you know is looking to buy, sell, or invest in Real Estate in the East Valley call me today at 480-458-7399.

John Ferrin, Realtor

HomeSmart
www.eastvalleyproperties.net
480-458-7399
Posted by

John Ferrin, Realtor

HomeSmart Gilbert

480-458-7399

                                                                                                                                       Gilbert, Arizona

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Comments (1)

Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

John, these 5 little known facts are what home buyers need to know in today's real estate market. #2 is especially important as not all lenders are the same or offer the same types of loans. Many home buyers may not know that little fact. 

May 06, 2014 03:24 PM