Everybody is searching for the best mortgage. In order to find the best one, you have to allot not only money but time as well.
A loan process, from application to closing, may take quite some time. Other times, this will be stretched much longer if you get denied of the loan and have to apply again.
Imagine how time-consuming it can be. And in the world we live in today, time is precious.
Waste time no further. Here’s something that might be of help — practical life hacks to get you approved of a mortgage fast!
How long does it take to get to closing?
The amount of time it takes to close varies depending on several factors. These include the kind of mortgage, the lender’s loan process and the borrower’s qualifications. A good estimate would be around one to two months from the date of application, given that it is a typical loan and there are no problems with the borrower’s qualification.
However, circumstances like incomplete applications and additional documentation may cause delays. This is why we have made a handy list of tips you should practice to make the mortgage process quicker.
1. Submit a duly accomplished application as soon as possible.
The day you hand in your loan application is the day the approval process begins. If you do not submit it as soon as possible, no loan will be processed.
However, it isn’t enough to just submit an application. It has to be complete with the necessary documentation. Make sure you include income verification and other documents that your lender requires.
For income verification, prepare at least two recent pay slips and your W-2s or 1099s of the last two years. They may also ask you copies of your bank statements, so have them handy as well.
2. Anticipate the need for additional documentation.
Every homebuyer/homeowner is in a unique situation. Lenders will base their documentation requirements on these situations. You have to foresee what other additional documents your lender may ask you.
For example, if you are going to use a cash gift for the down payment you should be able to provide a written legal proof that the money is indeed a gift and not a loan. Another good example is when you have negative entries on your credit report. Be prepared with a letter of explanation ( LOE) if you need to justify such entries.
3. Consider a Cosigner.
If after self-evaluation you have found out that your income or credit alone won’t be enough to qualify for a loan, consider getting yourself a cosigner.
A cosigner does not have to live in the same house and not have to pay part of the loan. The purpose of a cosigner is to guarantee the lender that the borrowed money will be repaid.
Having a cosigner means having another person whose income can be considered by the lender as a supplemental qualification.
The moment a cosigner signs the loan document, he/she also becomes liable to pay the full amount of the debt or a part thereof should you default the loan. It is important that you and your cosigner are on the same page regarding the legal and financial implications this has.
4. Get pre-approved of a loan.
It is wise to have a lender pre-approve you of a mortgage. It may not necessarily make the mortgage process quicker because it usually takes around 90 days to get a pre-approval. However, it will lessen the chances of you reapplying for another loan because you get denied.
A loan preapproval allows the lender to review your credit and verify your documents to approve you a certain loan amount. Because they have taken a look at your documentation, they can give you a heads up if they see any imminent problem. This buys you some time to work on improving these gray areas before proceeding to final approval.
If you wish to find yourself a good mortgage loan, consider getting preapproved for a loan.
5. Review your credit.
Many people take this step for granted. But when you make it a habit to pull your credit record and review it from time to time, you are actually doing yourself a big favor.
Erroneous entries and fraudulent records do not only harm your credit, it will also cause delays when you apply for a mortgage. Lenders will look at your credit score and history. If mistakes won’t be corrected, these may be taken against you.
Get rid of these errors before you submit a mortgage application to make the approval process smoother.
These life hacks are guaranteed to help ease the burden when getting a mortgage. Also, do not forget to talk to a lender so you’ll be able to get first-hand information from them.