When you are looking for the right home to buy, there are a lot of items to consider in relation to the home, its size, location, and price. But when you are preparing for the mortgage approval, you need to focus on keeping your credit clean and establishing a good budget for your home loan to be approved and that it will be an affordable addition to your finances. Here are some recommendations to help you through your upcoming mortgage loan process and to help make sure you can have a smooth experience through the home purchase and its closing.
Start the Loan Process Early
As soon as you know you are going to start house-hunting, you need to begin your mortgage loan application. The sooner you start your application process, the more time you will have to allow for the approval process to take place and to also adjust your housing search to fit within your loan pre-approval limit accordingly.
Start out by contacting a local mortgage broker who can take your application for a mortgage and get you approved as soon as possible. This approval will take into consideration how much your income is and the condition of your credit and its score. If you have some areas on your credit that you want to work on, you may choose to wait a period of time while you boost your credit score to a higher range and have a chance at a better loan and mortgage terms. Otherwise, get your pre-approval mortgage amount and apply that to your search criteria and start your home search.
Understand Your Expected Costs
Once you have found a home that you are interested in purchasing, you will need to submit the home's details to the underwriter along with any other documentation your loan will require to finish it to close. Then, based on what type of loan you are applying for, your lender will let you know exactly what your loan's down payment requirements are and an estimate of how much you will need to have as closing costs. Your lender and your realtor can help you calculate a good ballpark figure of your closing costs so you can include this into your cash funds you will need to reserve for your home's closing.
Also be sure you plan to hire a professional appraisal and inspection on the home. These two processes will verify the home's value for your mortgage loan approval, and will also check the home out for any underlying problems you may not be aware of. The inspection results will help guide you through any home price or contract renegotiations to ensure the sale is fair.