Friday, May 29, 2009

The Mortgage Application Process

The mortgage loan application process is one of the biggest financial decisions you'll make in your life. Like any momentous decision, you need to do some prep work before you apply for a mortgage. Once you have done the background, you will find the whole mortgage process is a lot less stressful and mysterious.

Before applying for a loan, you should check the current interest rates, (at an all-time low at the posting of this entry!) review your credit report for accuracy, and begin shopping for a lender. When comparing mortgage lenders, consider such factors as lock-in policies, fees and loan options.

Interest Rates
In a turbulent economy, Interest rates are constantly in flux. It is even possible that the interest rates will change between the time you start your mortgage application and the time you are approved. Even with a changing economic landscape, a smart shopper will compare the rates offered by different lenders before they apply for a mortgage. Find the lowest, and get locked in…

Mortgage Application
After you've chosen a lender or broker, you'll fill out the mortgage application. It might seem that this is a never-ending mountain of paperwork to read, sign and turn in. But, all the information is necessary and you should be diligent in filling out every form. I also caution you to complete the application honestly and completely. If you inadvertently (or intentionally) put false information on your mortgage application, it could seriously hurt your chances of getting approved. Be honest with your broker and lender, and there will probably be very few problems they cannot help you surpass. (FYI : If you are denied a mortgage due to a falsified application, you might lose your down payment. So take your time when filling out the paperwork, and be sure to get all your questions answered by the mortgage lender.)

Providing Documents
During the mortgage loan application process, you will be asked to provide a variety of documents to the mortgage lender. Always ask the lender whether or not they need the original document or a duplicate. If they need the original, be sure to copy each document for your own records when you apply for a mortgage. You might be asked to turn over canceled checks, copies of leases, bank statements, and such. Make sure you note what you have turned over in your records, and again – KEEP COPIES OF EVERYTHING!

Approval with Conditions
In most cases, mortgage approval comes with certain conditions. These conditions may include a satisfactory appraisal, home inspection, etc. Ask your lender what conditions and requirements you need to meet, and be aggressive about completing them on time. The quicker you provide your lender with paperwork, the quicker they can turn your mortgage around…

Making Changes to Your Application
If anything significant changes during your mortgage application process (changing jobs, marital status, etc.), tell your lender as soon as possible. On closing day, you will be certifying that no significant changes have occurred, so it's important to address changes as they arise.
Now keep in mind that everyone wants you to be approved for the mortgage loan as much as you do. Nobody is working against you in this process, everyone is working for you. It's in every one's interest to see the process through to successful completion. Be honest and helpful, and things will work out in the end.

Rich Ferretti
Jamison Realty
Mint Hill and Matthews

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