When you’re ready to buy a house, the last thing you want to do is wait around for your mortgage approval. This may make you uneasy—will your offer get accepted, or will you miss out on the perfect home? Thankfully, you can do a few things to help speed up the process. Here are four ways to get approved quickly for a mortgage:
Get Your Financial Documents in Order
When you apply for a mortgage, lenders will want to see proof of your income, your debts, and your assets. Organize your financial documents before you start the application process so you can easily provide the information the lender needs. It would help your lender (and your application) if they will see the following:
- Your last two years of tax returns
- The last three months of your bank statements
- Pay stubs for the past month
- Documentation for any investments or other assets you have
- Information on credit card debt, student loans, car payments, etc.
Preparing these helps the lender quickly sort through your information and move your application. You will also let them know you’re serious about getting approved for a mortgage.
Shop Around for the Best Interest Rate
Interest rates on mortgages can vary greatly from lender to lender. However, you can do the following to get the best interest rate:
Compare the Best Deals: Compare rates from different lenders to ensure you get the best deal possible. You can even use an online rate comparison tool to quickly narrow down your options.
Check Your Credit Score: Take a look at your credit score and consider if you need to do anything to improve it. This can be as simple as paying off some debt or making payments on time. A minimum of 620 is typically the requirement to qualify for a mortgage. Still, the higher your score is, the better rate you’re likely to get.
Look at Your Loan Options: Consider different loan options and see which fits best with your financial situation. An example is government-backed loans, such as FHA or VA loans, which often have lower interest rates and may be easier to qualify for.
Look For Discounts: Many lenders offer discounts for first-time homebuyers or veterans, so ask about any potential discounts you may be eligible for. You may get a lower interest rate or even eliminate some closing costs.
Work with an Experienced Mortgage Broker
Mortgage brokers act as middlemen between you and the lender, helping you find the best loan option. They’re also familiar with quickly working through all the paperwork, so they can help speed up your mortgage approval process. An experienced mortgage broker will also be able to determine unfair interest rate offers so you don’t end up with an expensive loan. To make sure you get the best mortgage broker, consider the following:
Experience: Look for a broker with several years of experience in the industry. This ensures they are up-to-date on all the regulations and know what lenders will approve quickly.
Reputation: Research online or ask around to find out if the mortgage broker you’re considering is reputable. Make sure they have a good track record of getting clients approved quickly.
Fees: Ensure you understand the fees involved in working with a mortgage broker and that their service is worth it.
Work with a Reputable Lender
There are a lot of lenders out there who are more interested in making a sale than in helping you get the best loan possible. Work with a lender with a good reputation and that you trust. When shopping around, you can ask the following questions:
- How long have you been in business?
- What kind of loans do you offer?
- What is your interest rate?
- Do you have any discounts or special offers available?
- Do you require a down payment, and if so, how much?
If a lender cannot answer all of these questions, or if the answers don’t seem satisfactory, it’s best to look elsewhere.
Don’t Make Any Big Changes Before You Close on Your Loan
Lenders will pull your credit report again just before closing on your loan. It could delay or even derail your loan approval if there have been any major changes to your financial situation. Only make big changes after you’ve closed your loan and moved into your new home. Additionally, if you’re already pre-approved for a loan, avoid any large purchases that could affect your debt-to-income ratio.
Finally, remember to review all the paperwork before signing anything. Make sure everything is exactly as it was when you first applied for the loan. This way, there won’t be any surprises or problems down the road.
Applying for a mortgage can be stressful, but it doesn’t have to be if you follow these steps. Preparing enough will help make the process as smooth as possible so you can focus on moving into your new home instead of worrying about your loan approval status.