It's Application Time....Be Prepared!

What should you be doing in order to prepare yourself for what lies ahead when applying for a mortgage loan? The following points will hopefully make the process easier to understand and help you index the items that you will need to consider.

1) Know your credit score and what's on your credit: This should be the first item you look into when considering to apply for a mortgage loan. For the most part I am sure the majority of you are on top of your credit and you know exactly where you stand. If you are nervous to find out what your credit is like, you probably have a reason. Plan ahead and make sure you are aware of your situation so you can tackle these issues prior to getting too involved in the home loan/purchase process.Are there any reporting errors or collection accounts that need to be resolved? Is there any derogatory information negatively impacting your score? You would be amazed how many reports have medical collections that individuals didn't even know were there! We can help advise you on minor issues or basic items. If your issues are more complex there are also reputable credit repair companies that for a fee will help you address and tackle the issue of repairing or erasing derogatory and/or erroneous information on your credit report. If you do have some items that need to be addressed these things can take time so you want to be on top of it.

2) Locate and organize your financial documents: You will need to have the following documentation readily available: Social Security Card, two year's W2's, 30 days of pay stubs, 2 months bank statements, and a quarterly statement for any investment/retirement accounts. You may be asked to provide a divorce decree, bankruptcy documents, Social Security Award Letters and Pension Statements as well. The bottom line here is stay organized and have this information where you can readily find it without difficulty. Should you be missing anything I would suggest you contact the necessary party (i.e. Accountant, Bank, Social Security Office, Employer, etc.) to get a copy of what you are missing.

3) Disclose Everything: I can't stress how important this one is. The loan process is very thorough and there are countless checks and balances. Always relate all pertinent information to your loan officer. You may think "Oh good he didn't ask me aboutmy large deposit in my checking account etc!" This doesn't mean it won't come up later. Very little ever slips by. Just be up front. Let your loan officer mention what may or may not be a problem. If you stay quiet it very easily could cause a bigger problem later and then you will be that much farther into the loan process. You could even find out the deal is dead and that is definitely something you would have wanted to know at the beginning. Most of the time what you may think is a problem, isn't. There are many loan programs and we usually have options for you. I just recently had a deal where a client came to me after working with another lender. A purchase contract was already in place, but I had to work with them on fixing a few credit glitches before we could get started. They failed to tell me they already had an inspection done on the property. Several weeks went by while we were working on their credit items before the inspection was mentioned. I took a look and knew right away that FHA would not accept the property. These buyers could have been looking for another home instead of just assuming everything was fine. Better communication and disclosure can save time and unnecessary headaches!

4) Get a Good Faith Estimate and work with a reputable lender: The most important thing to remember here is knowing what's involved in the mortgage process. Who are you dealing with and what are they charging you? This sounds simple, but it is very important. Be sure to look at the entire package your lender has to offer.(i.e. interest rate, APR, fees, ethical background, testimonials, and knowledge of the market). If you are only focused on interest rate you could miss something! The lowest rate lender in town may not always be the best option for you. Especially if they don't know what they are doing! Some choose to sugarcoat things or lowball their quotes to get prospective customers in the door. Just be on your toes and ask the right questions and make sure you are comfortable. Remember no question is a stupid question!These are four important items when it comes to applying for home financing. The process will be much easier and more pleasant if you are prepared.

Brought to you by:
Flat Branch Mortgage, Inc.