Gathering Necessary Documents
To obtain a loan, most lenders will request the same information. Gather these documents in advance and keep them in an organized file system on your computer so you can provide them immediately when requested. This step will save you a lot of time. Here is a list of the documents you need:
- Social Security Number
- Latest two bank statements from the last two banks
- Two tax returns from the past two years
- Copy of your identification (such as a driver’s license)
- Certificates of any mentorship or training programs for new shoppers
- Documentation of any other sources of income such as alimony, child support, hobby income, etc.
- Documentation of any name changes such as name change after marriage or gender change
Know Your Credit Score
There are a variety of mortgage types targeting people with different credit scores. Knowing your credit score gives you two advantages: you can check your credit report for any errors, and you’ll know the best type of mortgage you may qualify for. It is important to know your credit scores, and you can check them for free on many sites.
Use Comparison Sites
The internet is full of comparison sites for researching mortgages, and they can be a great way to cover a lot of ground quickly in your mortgage search. Many of them have the same lenders in their network, so don’t worry too much about using all of the available comparison sites. However, on the other hand, this may add to your shopping lists, and thus you may not want to subscribe to a flood of daily calls, especially from the same lenders. While comparison sites are helpful, it is also important to do some initial research on your own. Some of the best lenders for you may not be listed on these sites. Make a quick list of lenders that do not show competitive rates and make sure to reach out to them. Local credit unions may offer lower interest rates than banks.
Start with Pre-Approval from Multiple Lenders
Getting pre-approved for a mortgage means you’re completing part of the loan application process now before you choose a home to buy. Pre-approval has separate advantages. It reduces the time needed to process your financing when you find a home you want to buy, and it lets sellers know you are a more serious buyer. Certainly, you can start shopping around for homes while you go through the pre-approval process so you are working on both tasks. However, sellers often won’t be impressed with your offer until after you’ve received an official pre-approval letter.
Consider Working with a Mortgage Broker
Online mortgage comparison sites allow you to check several lenders quickly, but human mortgage brokers do the same job. There are some advantages to the latter: brokers can help you quickly find the best lenders for you based on your situation and mortgage goals. They may be more familiar with the acceptance requirements and how each lender works. However, they typically charge fees for their services. Nonetheless, if you are pressed for time, using a broker might be the quickest way to go.
Track the Process
Getting a mortgage is tough, and gathering all this information while trying to quickly complete the process can be a challenge. For example, if you forget to respond to the lender about one small detail, your application may be on hold for weeks. Therefore, it is particularly important to establish a system to track everything. You might use a spreadsheet to do this. You can also take notes on a clean sheet of paper and store them safely.
Questions
Frequently Asked Questions
What questions should be asked when shopping for a mortgage?
Here are some important questions to ask when shopping for a mortgage:
How much should I pay as a down payment?
What is the loan term?
What is the annual percentage rate (APR) for the loan? Is it a fixed rate or an adjustable rate?
If the interest rate is adjustable, how often is it adjusted? Is there a cap on the interest rate?
When does my interest rate get locked in? Are there fees for locking the rate?
What are the closing costs? Can you explain each one in detail?
What documents do you need to complete the application?
If I need to pay private mortgage insurance (PMI), how long should I expect to pay it?
What should you look for in a mortgage lender?
If you’re looking to secure a mortgage quickly, the lender’s response to your calls or emails may be an important factor in your choice of lender. How quickly they respond can also be an important criterion. Otherwise, here are some things to ask when comparing lenders:
How willing is each lender to waive fees?
What is the total cost of the loan with all fees and interest over the life of the loan?
What are the ratings and reviews of each lender from independent sites like Google or Yelp?
Source: https://www.thebalancemoney.com/tips-for-mortgage-shopping-in-a-hurry-5185981
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