Posted on: 11 February 2016
If you're like many Americans, you probably do not have enough cash on hand to purchase a home outright so you will need a mortgage loan in order to buy a house. Applying for a mortgage from a mortgage company may seem intimidating, but being educated on the process and knowing what to expect can increase the likelihood of your mortgage application being approved. If you're planning on buying a house soon, use the following tips when going through the mortgage application process:
Understand the State of Your Credit Report
Your credit report plays a big role in the mortgage application process. Mortgage lenders will use your credit score, as well as the information in your credit report, to determine whether you are a good candidate for a loan. It is never a good idea to apply for a mortgage without thoroughly examining your credit report. There can be errors on your credit report, so you should look at it several months before applying for a mortgage in order to ensure that any mistakes have been fixed and your report has been updated.
Have Cash on Hand
When you apply for a mortgage, your lender will want a clear picture of your financial situation. You will most likely have to provide tax returns, pay check stubs, and copies of bank statements to prove that you are financially able to afford a monthly mortgage payment. in addition to proving income, most lenders will want to see that you have cash on hand for a down payment-- typically the higher the down payment, the more desirable you are in the eyes of a mortgage lender. Applying for a mortgage loan when you do not have a healthy amount of money saved is not a good idea, even if you have a good credit score.
Do Not Quit Your Job
Mortgage lenders want to see that you have a stable job and a good job history, so do not quit your job right before you apply for a mortgage or during the home buying process. It doesn't matter if you have a new job lined up-- quitting your current job and being at a new job for just a couple of months can make you look like a risky candidate for a mortgage loan and decrease your chances of being approved. If you want to make a career change, wait until you close on a house and have the keys in your hand.Share