Many can agree that the mortgage application process can be grueling. One of the biggest hurdles is overcoming our emotions of possibly being disappointed. With my quick guide into the realm of underwriting you will understand the compensating factors that need to present before the application is complete for submission. Without getting technical I will emphasize the major application characteristics that will confidentially get your mortgage approved. Credit rating, employment history, and your savings pattern are three major compensating factors underwriters look at when evaluating the application worthiness.
Before formally applying for a mortgage get a copy of your credit report (www.experian.com) Although the credit check will cost upto $15.00, the report will give you a starting point of where you stand with all creditors. If you know the score ahead of time you can confidently gauge the strength of your application. Also, the credit score should be perceived as your report card. The more credit accounts open the higher your chances are in improving the GPA.
Budgeting for your new mortgage is made easier with having steady pay. Today's underwriting standards call for a two year continuous work history. There are exceptions to this rule so please read forward. Education history counts towards this period of time. For example, a college transcript and diploma can identify the length of time used for attaining for the new established employment opportunity. Also, for those changing from being self employed to being wage earners or vise versa the application must confidently show a lateral move or as little decrease in pay. In many cases less money is being made when starting a new business. During this growing process applying for a mortgage may not advisable as the borrowing power isn't maximized. Lending institutions want to minimize their probability of unemployment. Build your resume first and then confidentially apply for a home mortgage.
In the event of temporary loss in pay, all lenders like seeing a well established savings pattern. The more money saved the more confidently the application will stand out from the rest. Please keep in mind that all major large deposits have to be sourced and seasoned. For example, direct deposit paychecks are sourced from the employer and they are seasoned from the 60 day bank statement history. In the event a large deposit can not be sourced, it is advisable to dismiss this account or deposit from consideration or wait for the following two months bank statements showing only sourced deposits. Also, letters of explanation can be provided to underwriting to dismiss the large deposits from consideration. If money was gifted then the complete bank statement from the donor is requested and the check or money withdrawn must be identified. Always be prepared to organize your banking history before considering completing a mortgage application.
Although I have only discussed three mortgage application characteristics, I assure you that these are most heavily considered by underwriting. The better prepared you are the better the outcome will be during your future mortgage consultation. Make sure to choose a mortgage specialist that is most resourceful with identifying application threats and finding solutions that are most accommodating. Please consider me as a strong resource as through my current practice I have helped hundreds achieve financing for home ownership and refinance opportunities.