4 Tips to Streamline Your Mortgage Process
The process of becoming a new home owner may seem a bit overwhelming at times. Keep in mind these four easy tips for staying on course!
1. Go Easy on those High-ticket Items
Keep your mortgage buying power strong by avoiding the purchase of major appliances and furniture. (It's best to buy these items after you have closed on your mortgage.) Buying or leasing a new car can put your debt-to-income ratio (DTI) into overdrive; and buying that new boat may be very nautical, but not at all nice, as your DTI may capsize qualifying for a lower mortgage interest rate. All it takes is an extra payment of a few hundred dollars a month to reduce that mighty mortgage buying power by tens of thousands of dollars. You also want to maintain the credit rating/FICO score that helped you qualify for the mortgage in the first place. Making a major purchase any time before you close on the mortgage can affect the terms of the agreement—the loan amount or interest rate, for example—or may even disqualify you from mortgage approval.
2. Embrace the Paper Chase
Liquid assets are stable and easily-accessible funds: Cash, savings accounts, money market accounts, stocks, investments, and government bonds are common examples. Availability of liquid assets and showing proof of cash ownership means providing your mortgage consultant with a "paper trail," or physical copies of account statements, cancelled checks and deposit records. Keep in mind, too, that it's easier to keep track of your liquid assets if they stay put (stay in the same accounts) during the mortgage process.
3. Rules of Employment
While not really a hard-and-fast rule, a minimum two-year engagement at a place of employment, where you receive bonuses and overtime pay, is a near-ideal situation if you're looking for a mortgage. While starting a new job that offers a better salary is obviously a terrific move, a stop-and-start work history has the opposite effect. Job stability—it's the name of this game.
4. Bills Are Faithful Things
It's absolutely guaranteed—your regular bills will continue to be a part of your life while you move into your new home buyer status. Keep up the good payment habits, and your credit score (and mortgage interest rate) will be the best your mortgage lender can offer.
By applying the above "Fast Forward 4" tips to your mortgage process, you will stay on the right track for your first mortgage.
Complete Homebuyer's Mortgage Guide
Minimum and Maximum loan amounts apply. Rates and programs subject to change at any time. Loans subject to borrower qualifications, property evaluation and credit approval. All rates and program guidelines subject to change without notice based on consumer eligibility and marketing conditions. All loans subject to credit approval and compliance with underwriting standards.