Congratulations on finding the home of your dreams and making it through the offer process. Now comes the challenging part – getting through the loan approval process.
As soon as your offer is accepted by the selling party, your loan application will go in to the underwriting approval process. This could take as little as two weeks and as much as two months and is often the most stressful part of the home buying process for the buyer. Unfortunately, most buyers will now begin to hear scary stories from their friends and family, based on their own experiences with the lending process. Scarier still, the idea of having to find temporary housing or putting your belongings in storage if/when the loan does not come through on time. Fear not! There are some tips and ideas that you can look to so that you can get through the closing process as quickly as possible.
First, know how much you can spend on a home. The lender will tell you how much you should qualify for but it is important for you to also look at your monthly budget and make smart decisions. How much are you paying for rent now and how much more can you feasibly stretch for a mortgage?
Second, know your credit score and be aware of any credit-related challenges you may face. There are several free resources to go to when pulling your credit report. Be sure to do this well in advance of applying for your home loan.
Provide your financial information as soon as possible and be honest about anything that may be seen as a red flag to lenders. If you know about it, they will soon know about it and it is better to head it off early.
Turn over paper and electronic copies of your financial documents, including recent tax returns, bank statements, title work for vehicles and other property, etc.
Be in constant communication with your lender and their team. Asking if there is anything else you can provide and being proactive may prompt them to move your file along faster.
At the end of the day, you will have to rely on this team of professionals that you have chosen to work with to get your loan application to approved status and on to the closing table. With that said, being prepared and organized will go a long way towards getting this done on time and with the best results.