The process to buy a home starts out with applying with a mortgage lender for a loan that has favorable terms to fit in with your budget and finances. Here are some tips to help you out through the mortgage loan process when buying a new home.
Shop Around
When you plan to buy a house, you need to start the process for a mortgage loan as soon as possible. By starting early, you will have a pre-qualification with a maximum loan amount and you can provide your pre-qualification to a seller when you make an offer to buy their house. The sooner you start the loan approval, the more ahead you will be when it comes time to finalize the loan with the lender's underwriters and get it all finished in time to close on the home purchase.
A good idea to help you find the best loan offer is to shop around with different mortgage lenders. You can check with your bank or credit union, and you can also apply with a mortgage broker service or a company that specializes in mortgage loans. When you apply with more than one lender, they will each review your credit, but all the credit requests are not going to hurt your credit. By shopping around you will be able to compare loan terms on the rate and payback details.
Keep Your Finances in Order
As you start off the application process and wait for further details on documentation and final approval, there are some steps you should take to keep your credit and finances in correct standing. Your credit report that the lender requests should stay the same during your application process, which means you don't want to take any action that is going to alter your credit, debt, and income situation. Make plans to keep your credit as-is from your application, so do not apply for any new credit cards or make large charges on any existing cards. These changes will show up on your credit file, and your lender will likely review your credit again just before your home closes, so don't make any unexpected changes to surprise them.
Continue to pay your rent on time if you are currently renting from a landlord or property manager. Make all your payments on time with credit cards, installment loans, and other financial obligations. And don't quit your job to start a new job, even if it is in the same field, as this can adversely affect your chances of loan approval.
Speak with a mortgage lending company to learn more about this process.
