A myth that has circulated in recent times is that it is difficult to get a home mortgage. This is just not true, however, today to get a mortgage you have to have more than a Social Security number and be a living, breathing human. You must have a good credit history and a balanced financial position.
Another myth is that you need 20 percent for a down payment. Again, not true. You may obtain an FHA loan with as little as a 3.5 percent down payment or even 0 percent down if you qualify for veterans benefits.
Obviously to get a loan you must apply for credit with a mortgage lender. The government has moved the pendulum in the loan process from easy qualification and little documentation to, in some cases, where the borrower has to supply extensive paperwork.
To first-time homebuyers this is not a problem, but to homeowners who have taken out mortgages in the past, this can be challenging. Many previous homebuyers do not understand that the mortgage rules have changed and at times they get frustrated with their lenders and today’s lending process. They recall how it was in the past.
It is important to understand that the government has caused many of today’s rules and documentation requirements to change and lenders are simply attempting to comply with rules that may be revised on a daily basis.
From where we sit, it seems lenders are as frustrated as the borrowers.
One particular cause of frustration for borrowers is that there may be several requests for documentation during the course of loan approval. Borrowers often wonder why so many requests and begin to get aggravated with the process. Unfortunately, this is pretty much the norm in today’s mortgage world.
To expedite your loan approval so you may move into your new home and to assure you get the mortgage you requested, there are things you can do to help. When asked for documents, get them to your loan adviser as soon as possible. There are many people who have to review the documents and a delay on your part will delay loan approval.
Complaining about the process has not seemed to help expedite approval. Don’t call your lender every day to check the status of your loan. This just interrupts the lender’s work flow and slows the process.
If you have a home in escrow and are in the midst of getting a loan, delay any major purchases that will be bought with credit.
Two unfortunate recollections come to mind that caused buyers to be disqualified for home loans. In one instance, the buyers were so excited about their home purchase that they rushed out and bought new furniture for the home on credit. This caused their credit to change and disqualified them for a home mortgage.
In another instance, the buyers went out and financed the purchase of a new truck which disqualified them from the purchase of a home.
When applying for a mortgage keep an eye on the end game which is getting approved so you may move into your new home.
Ray Pugel is a designated broker with Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.