Tips To Getting A Stress-Free Mortgage
Getting a mortgage is one of the biggest decisions you’ll make in your life. You need to be prepared and you need to talk to an array of experts before you buy your home. The first person you’ll want to speak to is a mortgage broker. He or she will discuss the application process, guide you through the steps you need to get pre-approved to get you the best rate.Any professional will tell you that you shouldn’t start to shop for a home until you know exactly how much money you can afford to spend. A pre-approval gives you some confidence that the bank trusts you and you’re a qualified borrower. The is beneficial because the last thing you want, when going through the entire home buying process, is to misjudge how much money you can afford to borrow and spend. During the early stages, it’s important to be upfront and provide accurate information so that your broker and banker are aware of any possible challenges ahead. If you don’t provide accurate information then it will just cause delays later down the road and possibly prevent you from getting the home you want.
The Pre-Approval Process
The pre-approval process vets you as a borrower but it’s not guaranteed that you will automatically get a mortgage or the amount you want. You should start the pre-approval process as soon as you have decided to buy a home. It is usually guaranteed for 60 to 120 days, locking in your interest rate which means it won’t fluctuate between the start of the process and the time you buy your home. For the pre-approval, you have to provide supplemental documentations proving your income, the source of your down payment, and your assets and liabilities. The bank will also look at your credit score
to determine your credit-worthiness.The bank will then give you a written confirmation that you’re pre-approved.
Co-Signer or Guarantor
Many people, especially the younger generation, need a co-signer or guarantor. A co-signer may be required by the lender to strengthen the application. It’s important to get a co-signer with a good credit history as it will be their responsibility to pay off the debt if you default. The more you know about your co-signer, and the more prepared you are with paper evidence of their financial status, the better chance you have to being approved.
Final mortgage approval
Once you have a mortgage pre-approved, you’ll have to watch out for anything that might effect your cash flow in the near future. You shouldn’t acquire any new debt, like the purchase of a new car. Even changing employers can affect your approval, so you want to keep your financial picture as stable as possible. If all remains the same from the time you got your mortgage pre-approval to the time you’ve made an offer on a property, then you’re halfway to your loan.You will want to conduct a home inspection on the property to ensure that you didn’t overpay for the home and you don’t get any surprises, like a leaky roof or mold in the basement.
If everything goes smoothly and you get final mortgage approval, congratulations – you’re on your way to owning your new home. If you need any help along the way contact me HERE