5 Tips for a Smooth Mortgage Process
From approval to close, what you can do to make sure there are no surprises
While buying a new home is a milestone life event, navigating through the mortgage process can be overwhelming, especially if it is your first home. However, there are ways you can help the mortgage process – from approval to closing – be successful. Here are five tips to help you get into your new home as smoothly as possible.
- Review and Submit Documentation in a Timely Fashion
Being consistent and prompt in your communication with your mortgage lender will keep the mortgage process moving. Try to return all requested items to your loan officer within 24 hours. This way, if your lender needs clarification, you can provide it quickly. When you are submitting documentation, make sure you are providing your lender with all the pages (including blank pages) as lenders must include the full document in your mortgage application. Continue to save all paystubs and bank & investment statements as updated documents may be required right before closing.
- Keep Your Finances Stable
Between applying for a mortgage and your closing, avoid making any substantial changes to your finances. This could include but is not limited to: opening new credit cards, consolidating or closing credit cards, increasing credit card balances, obtaining new debt, making major cash purchases, or starting new home improvement projects. Also, try not to make large bank deposits other than payroll. Large deposits must be proven acceptable before moving forward with the mortgage process. Finally, continue making payments on time for any accounts you may have. An updated credit report is always reviewed right before closing. This credit review does not count as a credit inquiry and will not affect your credit score, but information is used to determine loan eligibility. Any large financial changes that have occurred since the original report was pulled can alter your credit score and debt-to-income ratio.
- Do Not Pay Off Collections or Charge Off Accounts
This can actually drop your credit score. Your lender will let you know if payment is required for approval. Additionally, do not dispute any items on your credit report.
- Avoid Quitting Your Job or Changing Employers
Changing your employment status can cause the mortgage process to pause. Your lender will need to make sure you are still able to make your mortgage payments with your new employer which could cause a delay in your closing. If you happen to find yourself in this situation, discuss this with your lender as soon as you know of the change so you can work through it together.
- Purchase Homeowners Insurance
Finalize with an insurance agent within 10 days of your purchase agreement so you know you can walk into your closing with a valid homeowners insurance policy.
Wendy S. Scharer
Mortgage Lender and Retail Bank Manager
NMLS No. 2075378
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