Most people think that home purchasing ends once they find a suitable property. In reality, this is just the beginning of the process. Before you start buying fancy furniture, we suggest that you finish all the technical stuff pertaining to the mortgage.
It takes 46 days for an average American to close a mortgage deal. Of course, you can do it much quicker with the right preparation. Keep in mind that sellers prefer doing business with buyers who can close a deal fast. This is especially true in competitive markets where there is high demand.
Anyway, here are 6 tips for quickly closing your home mortgage:
Get an expert
Having a loan expert in your corner, such as Ahmad Azizi, branch manager at Option Funding, Inc., can help you finish the process as painlessly as possible. Not only do these experts have the necessary experience, but they also have a bank connection that will get you approved much quicker.
Prepare the necessary documents
The first thing you need to do is get all the documents in one place. Make sure to do this before you start checking out the houses. That way, once you find the right property, you can look for a loan the next day.
Aside from placing originals in one binder, you should also keep digital versions in a folder on your PC. That way, if you need to verify something quickly, you can simply send the files to the lender. Among others, you’ll need things such as bank statements, pay stubs, investment account statements, W-2s, tax returns from the last two years, etc.
Contact a lender
Ideally, you should contact a lender before you start looking for homes. If you hire a loan expert beforehand, they can point you to a company where you’re most likely to get approved.
Once you sit down with a professional, they’ll tell you how much money you can get. That way, you can plan your purchase accordingly. There are lots of situations where buyers go overboard with their desires only to realize that no one’s going to approve them for that amount of money.
Contacting a lender in advance has another major perk. When you do this, banks and other financial institutions perceive you as a financially responsible individual who is likely to return the loan. You should be honest with the loan officer. If you have any kind of debt or incoming payments, they should know about it.
Lastly, the loan officer can help you by pointing out all the small things that are potentially reducing your credit score. If you have enough time, you might address these issues allowing you to get a better deal for yourself.
Go through your credit reports
According to data, 34% of all credit reports have some sort of error. Given that this is the most important document when applying for loans, you shouldn’t mess anything up. You should especially pay close attention to things that might bring your score down.
The great thing for US citizens is that they can get an updated free report every year from Equifax, TransUnion, and Experian. Furthermore, there are a few websites where you can easily access these documents. Although these reports don’t show the credit score, they have all the details pertaining to your spending history.
Don’t stop at pre-qualification
Financial problems are one of the most common reasons why housing deals get delayed. To avoid this, you should be as thorough as possible. Most people think they’ve finished their application with the pre-qualification process. But the reality is that this procedure isn’t as important as much as we’d like to think.
Ideally, the financial institution should perform as much underwriting as possible in advance. That way, you’ll stand out in the eyes of the seller. Strong pre-approval is another thing that can help you in this particular situation.
Avoid drastic financial changes
During the whole process, you should avoid making any drastic financial changes. These alterations might affect your score as well as your debt-to-income ratio. Also, unnecessary luxury spending will make you look like an irresponsible consumer who might not return the loan.
You should especially be careful with a sudden job change. Car loans, pool and furniture purchases, and increasing your credit card limit are just a few things that can get you in trouble. Even if some of these purchases are necessary, try to patch things up until you get approved.