If the thought of applying for mortgages strikes you with dread, you are not alone. Many people who have never applied for mortgages in the past may be intimidated by the process. Even those who have experience in this area from past transactions may be anxious about learning about their final loan approval status. While there is no guarantee that you will be approved for the home loan that you have applied for, you can decrease your stress level and improve your chances for loan approval by following a few helpful tips.
Be Honest With Your Lender Up-Front
Many home loan applicants are fearful that some situations in their financial profile may make them less likely to get approved for a loan. For example, you may have recently changed jobs, or you may have a late payment on a credit card account in your recent past. Some may even attempt to hide debts and financial obligations. There are a wide range of loan programs available, and some loan programs may be more lenient in certain areas than others. Your loan officer can steer you toward the best program for your situation if you present all of the facts to him or her up-front. Keep in mind that the lender will ask for a great deal of documentation during the loan process, so these and other factors will almost certainly become known to the lender at some point.
Avoid Maxing Out Your Loan Amount
When you initially apply for a home loan, you will receive a pre-qualification letter that shows the maximum loan amount you may qualify for. While you may be inclined to purchase the nicest home that you can qualify for, it is important to avoid maxing out your loan amount. This can make it much more difficult to underwrite and approve the loan in some cases, and it also may eat up your down payment funds. Keep in mind that you need to keep some funds in reserve to pay for the property inspection, appraisal and more. You also need money to buy new furnishings, make repairs to the house and more after closing. The WFCU Credit Union website has more online resources available.
Do Not Change Your Credit Profile
One of the most important tips to follow when applying for mortgages is to avoid changing your credit profile. This includes maxing out existing credit cards and applying for new credit. Both can change the underwriting of your loan and may create delays in the loan process. This can also decrease the loan amount you qualify for and may require you to bring more money to the closing table as a down payment.
While applying for mortgages may still be stressful, these tips can help you to reduce your stress level. Furthermore, they can prevent delays and help you to get approved for the loan that you were pre-qualified for.