By evaluating common pre-approval pitfalls you can increase your chances of an actual loan approval & smooth home-buying process. Also, many potential approval road blocks can be avoided early and corrected if time is taken to fully & completely prepare for your mortgage loan. The following list will help you increase your chances of a quick and thorough Mortgage Buddy pre-approval.
- Be as accurate as possible when providing your mortgage application information to your Mortgage Buddy, even if you think it is not relevant. Chances are it is relevant to a mortgage underwriter. The application is the foundation for the whole mortgage underwriting process, inaccuracies at this point could create serious issues later.
- Make sure you know where the source of your down payment money, before you start the pre-approval process.
- Do not transfer or deposit any money in your accounts without first discussing it with your Mortgage Buddy. Deposits and transfers create more paperwork and can slow down the process.
- Provide complete bank statements & asset statements. These statements must contain your name, address, full account number (no Xs or partial numbers), bank or institution name, all pages of the statement (if it says page 1 of 4, you need to provide all 4 pages even if page 4 is blank.)
- Be aware that there are out of pocket expenses to budget for such as, but not limited to, an inspection, an appraisal, your homeownerâ€™s insurance policy, and any oil or propane left in the tank or firewood left at the home.
- Be sure to disclose any changes in circumstances that occur during the process – new job, pay raise, etc. Also try not to change your credit profile by making late payment or taking out additional credit.
- The final pitfall is in regards to time management. Your Mortgage Buddy can only work as quickly as you provide him the requested paperwork. Try to send over required documents in a timely and complete manner and try to be organized when doing so. Keep in mind that the underwriters are working on many files, not just yours, and review documents on a “1st come, 1st serve” basis.