"Why does it seem SO hard when applying for a mortgage?"
I am asked this on a regular basis! Let's break down the process into three important things to know. Applying for a mortgage can be a lot of work but it doesn't have to be stressful or difficult.
Applying for a Mortgage, Step 1:
First, you must obtain a pre-qualification status from your lender. There isn't a formal verification process but this will allow you to understand any credit score issues as well as any goals or needs you may have, with your lender. The pre-qualification process generally occurs over the phone, and the lender relies on the information you divulge as the basis of their assessment of what mortgage numbers you can look at. It's important when communicating with a lender to be 100% honest and up front. Not only will hidden history slow down the process in the future, it also shows good character to be open about all aspects of your financial history
Applying for a Mortgage, Step 2:
The next step is pre-approval. This involves FAR more information to be given, including but not limited to: a full mortgage application, credit report, pay stubs, tax returns, bank statements, etc. Being pre-approved means you will now have a pre-approval letter that most agents will require before they work with you. This shows prospective sellers that you are ready, willing and able to buy. This process also allows you to understand the price range that you have been approved for and will guide you in your home search.
Applying for a Mortgage, Step 3:
After the pre-approval, and when you have found your dream home, you will work with your Realtor to submit your offer and once ratified (signed and terms agreed to by both parties), you will need to once again be in touch with your lender to have them begin the underwriting process, which will set the ball in motion. This stage of the process may require additional documents to be produced, so be prepared for that request.
It is wise to be prepared when beginning your home search by gathering the paperwork ahead of time that your lender will want to see. This allows you to be in control of the situation and not feel pressured or stressed to find your supporting documentation.
To receive a free checklist of the paperwork your lender will require for a pre-qualification and subsequent pre-approval, fill out the contact form below.
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