In today’s market it can be quite challenging to get a mortgage, even if you have already obtained one. With capital requirements on banks making them more and more cautious about lending their money you need to make sure that you prepare as much as you can (especially if you’re a first-time homeowner with a relatively small down payment and/or little collateral . According to Time Magazine, preparation is the key to a successful mortgage request, or at least a more stress-free one. Here are some of the top tips for making sure that you are well prepared.
Bring All the Paperwork
The more financial documentation of your current situation that you can provide, the better off you are. Financial institutions want to know that they can get the money back that they lend you. Often times, they have their own list of things that they want to see. Usually, they want two year’s worth of bank statements as well as two year’s worth of tax returns, job histories, and the like.Make sure that you bring more if you can and if it paints a better long-term picture. I’ve talked to many people (especially young home buyers) who were asked to get certain documentation, and then two weeks later the lender suddenly decides they need more. If this happens 2-3 times (not as crazy or unusual as one would guess) you’re looking at some serious delays, and this can mean missing out on that bargain of a house you had all picked out. That’s why I recommend getting as much stuff as possible together before walking in – bombard the lenders with information so that everyone can cover their behinds and tell their boss that they did their due diligence (even though they likely didn’t read half of the stuff you threw at them. You may not have to bring in hard copies of this information. It may be enough to bring in a digital copy.
Get Someone to Help You
Realtors are not often the best source for financial recommendations. They have no way of knowing for certain what you can get given your specific situation. Additionally, they have a strong incentive to make the sale no matter what other considerations there are. For the best/least biased information, set up an appointment with a mortgage professional. This individual can help you to better understand your unique situation and provide key recommendations for negotiations. They may even be able to help you get a better deal. Fee setups range based on the services provided. Some individuals can help provide you with invaluable information for both the mortgage process and your financial situation. A mortgage refinance calculator can help give you an idea of what you may want or can afford, but it does not help you figure out whether or not you can achieve it. It’s a valuable tool in the right hands, but it can give the wrong conclusions to someone who is not familiar with the relevant details.
Do Not Get Mad at the Requests
Banks and lending institutions often ask for multiple copies of your documents. They also tend to ask for some rather odd and obscure financial documents and verification. Instead of letting your frustration get the better of you, give them the paperwork that they ask for. According to many within in the industry part of this back-and-forth is to get rid of the easily swayed. You just need to hang on. If it seems like it’s going on for too long, then remember that you can always choose to go to another lending institution. Some have fewer hoops to jump through than others.
Related: Understanding Mortgage Fundamentals
Also, remember that the bank is going to be asking some sharp questions. They need to be able to justify their reasons for giving you the loan, and so they may ask you more questions than you think is their business. Just take them in stride. Remember that there is nothing personal against you. They just need to know what to expect and whether you are going to be able to make the repayments. If you can handle the questions with poise and respond with the information they need, you will increase your chances drastically.