Purchasing your dream home involves borrowing five or six figures from the bank. This amount is typical, but the process requires specific steps to ultimately fund your property purchase. Discover the simple ways to make a home-loan process easier so that you can move in with rapid speed.
1. Gather Your Documents Now
There are many different documents that are necessary to even start a home-loan approval. When you decide to jump into the real-estate world, look for your documents first. You’ll need two years of income-tax returns, two consecutive pay stubs, identification and more, reports Forbes Magazine. Bank statements are often used too. These documents verify your income so that a home loan can be easily approved. The lender looks for consistent paychecks and bill payments. Being a responsible spender and saver will make your loan funding a much faster process than without the documentation. Shuffling around for the paperwork later on will only increase the time it takes for a positive decision on your financial future.
2. Choose Your Home Bank
Make the home-loan process easier by choosing your home bank as the lender. This bank already knows your spending habits. There’s a documented list of transactions within their system already. By starting the loan process with your current bank, you might have a faster process when it comes to funding. They may already have your documents on file, for example.
Additionally, your bank may be a local lender or credit union. These smaller institutions will often be involved in community outreach, which includes improving the area with more homeownership. It’s possible to find low interest rates and fast approvals with these local lenders.
3. Be Available to Your Loan Officer
You’ll be working very closely with your loan officer. This process isn’t just a single appointment and immediate funding either. It takes several weeks for a loan to go through, and your loan officer may have questions during this process. Be sure to give the loan officer your main number and answer it as much as possible. Missing even one call can lead to several days added to the loan process. You can clear up any misunderstandings, sign documents and send in paperwork whenever requested to make the process easier.
4. Stop Spending Money
An issue that commonly arises for borrowers is spending mistakes during the home-loan process. Ideally, don’t make any major purchases between applying for the loan and finalizing the mortgage. Postpone purchases such as cars, boats, recreational vehicles and similar items. Purchasing these items negatively impacts your income and credit history. It’s possible to see a loan pulled from an individual because of poor spending habits. This scenario also includes expenditures for big vacations. Simply spend money on everyday items until you close on the property.
5. Ask for a Pre-Approval
Discover Card suggests a pre-approved loan as a way to streamline the process. A pre-approval essentially takes you through part of the loan process. The lender asks for your documents and comes up with a loan amount that would be possible for your financial situation.
As you shop around for homes, you’ll know the price range that’s appropriate for you. Once you find a home that’s desirable, your pre-approval can be quickly transitioned into a funding reality. Other people who bid on the same home may not have a pre-approval, which puts you first in line to land the perfect home.
You can always speak to your real-estate agent when it comes to the home-loan process. He or she will usually have a good idea of the steps involved. Clarify any concerns so that you can apply, fund and purchase that desired home.
