The Do’s and Don’ts of the Mortgage Process
Trust us, we know the mortgage process can be stressful. From bank statements, credit scores, and interest rates, to loan estimates and closing disclosures, there’s a lot that can bog down the home-buying journey. That’s why we’ve compiled our biggest Do’s and Don’ts to make the mortgage process seamless and speedy. Cut through the noise so you can get to the fun stuff: finding your dream home!
DO: Get Pre-Approved Early
Apply online, at anytime!
DON’T: Go House-Shopping Without Knowing What You Can Afford
When you get pre-approved early in the mortgage process, you identify how much house you can afford. With a pre-approval letter, you have the opportunity to make a stronger, more competitive offer since the lender has already verified your income and assets.
DO: Work with Homebuying Professionals
Contact the CORE LENDING Team today!
DON’T: Think You Have to Do it Alone
Consider us as your personal home loan coaches. Each member of our team has a unique skill set and experiences to help you achieve your goal.
DO: Understand Your Credit
DON’T: Open or Close Credit Lines Without Consulting a Professional
Understanding your overall credit is important when applying for a mortgage. You can request a free copy of your credit report. If something looks inaccurate, contact the credit agency. Be sure to avoid opening new lines of credit, closing credit lines, making large purchases, or co-signing on a loan before or during the mortgage process. Honesty IS the best policy so be sure to includes ALL debts and liabilities in your mortgage application.
DO: Keep Lines of Communication Open
DON’T: Be Slow to Respond to Your Mortgage Professionals
Our team will be in contact with you throughout the entirety of your mortgage process. You can keep items moving by providing your loan officer with necessary documents and information as soon as possible. One key component to getting an on-time approval is the level of responsiveness of the borrower.
DO: Keep Your Current Job and Income
DON’T: Quit or Change Jobs
Applying for a mortgage is about your stability and making major life changes, like switching jobs, can hinder the mortgage process. Amending your tax returns can also cause issues in the application process. In some cases, you may need a new loan approval.
Pay raises and promotions are exceptions to this rule.
DO: Make a Savings Plan
DON’T: Make Major Purchases
Your main focus during this time should be SAVING not spending. Don’t make any large purchases like new furniture, a car, a boat, etc… You could need these funds to make an earnest money deposit. Large purchase can also impact your credit.
Pro Tip: ALWAYS pay your bills on time! Late payments are red flags on mortgage applications.
DO: Maintain a Paper Trail
DON’T: Make Large Bank Deposits
Mortgage Professionals are required to document where your funds come from for earnest money deposits and down payments. Be sure to have a clear trail of money going in and out of your accounts and where it came from.
Avoid making large cash deposits or electronic transfers into your personal banking account. This does not include depositing your paycheck.
Pro Tip: If you’re self-employed, it’s smart to keep your person funds and business funds in separate accounts.
DO: Keep Good Records
DON’T: Be Surprised if You’re Asked Provide More Documents
Key documents Mortgage Professionals like to see include (but are certainly not limited to) documents related to: income, employment verification, current debts or obligations. This is where a good paper trail of W2s, tax return documents, pay stubs, and bank statements come in hand.
DO: Ask Questions
DON’T: Panic! (No Seriously, You’re Going to be Fine)
Our goal is to make you feel confident and knowledgable about your finances and the mortgage process. There are no stupid questions - so ask away! The mortgage process may be overwhelming and confusing at times, but that’s why we’re here to help. Through trust and open communication, you’ll learn more about the mortgage process than you expected, all while making your dreams come true.
Documents to Obtain to Prepare for the Mortgage Process
Remember that the list of items requested will vary from borrower to borrower and even transaction to transaction.
TWO (2) months of most current asset statements for all accounts, including blank pages.
TWO (2) years of W2s
TWO (2) years of federal tax returns with all schedules
Recent pay stubs
Most recent statements for retirement accounts (IRA, 401(k), etc.)
Copy of driver’s license or proof of ID
Mortgage statement for all properties owned
Homeowner’s insurance for all properties owned
YTD profit and loss (P&L) statement * Self-Employed Borrowers