Get your documentation in shape
Mortgage lenders today are particularly efficient about getting as much financial information on a borrower as possible to confirm loan repayment will not be a financial hardship or become too difficult for the borrower.
In recent years, borrowers were applying for loans they obviously were unqualified for and as a result a vicious cycle was created. This was the root cause of the problems in the mortgage industry and housing market that resulted in a mass occurrence of foreclosures across the country.
As lenders try to come back from their mistakes, they are making sure that all i’s are dotted and t’s are crossed. You will need to speak to your chosen lender in advance about what kind of information and documentation will be needed for the loan application. You will likely need some lead time to gather your income statements, your previous tax records and other detailed financial information.
Enroll in a class
As a first-time homeowner, the amount of information you will have to take in can be overwhelming. With the unfamiliar terminology and the amount of financial information that will be processed, it may be in your best interest to take a class for first-time homeowners.
Many local governments offer these classes for free or for a low fee. You can get more information from a local realtor about classes if you can’t find one on their own. Most classes only last a few days and can be highly educational. Some mortgage programs, such as those through the government, will require classes be taken in advance of the mortgage approval process but even if it’s not a requirement, you can certainly benefit from the information provided to potential homeowners.
Stay on top of things
Throughout the mortgage process, there will be a lot of paperwork and information being passed around. The lender, the realtor and other companies will be sending you information for months. Keep a dedicated file where you can keep all of your documentation in one central location for easy access. Any lost documents or information that delays the loan process can jeopardize your loan approval and will certainly stretch out the entire home-buying process.
The more you know about mortgages and the more prepared you are to go through the process, the more likely the experience will be a smooth one, even if you are a first-time buyer. Continue to educate yourself on mortgages even after you’ve completed the process. If you are ever interested in refinancing your current mortgage or buying a different home, you will be armed with the information needed to get the job done right.