Buying a house should be a memorable and exciting experience. Though we've all heard about the stress and anxiety making such a major purchase can cause, there are ways to prepare in advance which will help you and your Real Estate Team, better manage the process and keep the positivity flowing.
Meeting with a lender to pre-qualify for a home is one of the initial steps in the home buying process. I've met with many a nervous prospective buyer who has, for weeks, played out all their worst case scenario fears of not being pre-approved, or not being pre-approved for the amount they want. This is completely normal.
Speaking with a Mortgage Loan Officer about your finances, credit, debt, savings and any mistakes you might have made in relation to these topics has the potential to make clients feel vulnerable. Factoring the added angst that comes with counting the minutes to see if you will be able to get the mortgage to buy the house of your dreams, and it's easy to understand how the pressure can mount in the mind of a mortgage applicant.
Here are 4 tips for potential borrowers that will not only help to soothe your anxiety as a borrower, but will help your Mortgage Loan Officer process your information:
- Create a Home Buyer's Notebook or Folder: The process of buying a home from pre-qualification, to finding a home, to closing, can take 1 - 3 months and in some cases, as with a short sale, even longer. Create a dedicated notebook, or file where you can track your conversations, the home's you've seen, your mortgage status, and your weekly "to-do" list. Keeping this notebook handy will help you track your progress and stay focused.
- Review Your Budget: One of the questions only you will be able to determine is what you can afford when it comes to your monthly mortgage payment. Your Mortgage Loan Officer (MLO) will analyze your information to determine what you are qualified for, but they are not aware of all of your monthly obligations - only those payments that show on your credit report. Expenses for cell phone, utilities, etc are not evaluated by the MLO during the pre-approval or approval process. It's a good idea to determine a range of monthly payment with which you would feel comfortable with, prior to speaking with a lender.
- Organize Your Documents: Most lenders will want to see pay stubs, tax returns, W-2s, bank statements and retirement statements at some point during the mortgage process. In some cases, they may ask for additional documents or additional copies of documents that you've submitted throughout the processing period. . It's can be helpful to collect and organize these documents ahead of time, and if you can, scan them onto your computer so that you can access them as needed.
- Review Your Credit: Get a copy of your credit report and familiarize yourself with it. Familiarizing yourself with your credit report before you speak with a lender will ensure that you are aware of any blemishes, late payments or other issues that may negatively affect your ability to qualify. It can also help to protect you from fraudulent charges and accounts being opened in your name. Your MLO will most definitely pull your credit report to review your FICO score, but you can reduce the stress that may surround this step in the process if you've already done your due diligence in reviewing the report yourself. You can obtain one free copy per year of your credit report from www.annualcreditreport.com
Please Note: This article is provided for illustrative purposes only. It is not an offer or commitment to lend money, and it is not an advertisement for a specific mortgage or a specific interest rate. Contact me to run the numbers for your situation.
How Can I Help You?
As a mortgage loan officer with Jersey Mortgage Company, I can assist borrowers in New Jersey, Connecticut, Florida and Pennsylvania with getting pre-qualified for a home loan.
By offering information and educating clients on the mortgage loan process and servicing each borrower's individual needs, and partnering with Realtors to create a seamless transaction, I am able to exceed expectations and ensure that deals are closed on time!