Getting a home mortgage is meant to be a relatively pleasant part of the home purchase process. But problems develop all too often that can cause the mortgage approval to be delayed or even denied. If you are planning to purchase a home in the near future and want to enjoy a smooth mortgage application process and the fastest possible approval, take time now to ask these questions and make any changes necessary.
Is your credit report correct and will it reflect positively when reviewed by a mortgage lender?
One of the first things consumers can do to be proactive about applying for a mortgage is to check their credit report. Doing this well before making any formal application gives prospective mortgage applicants time to correct any discrepancies or problems that might be listed on the report.
Are your current debt obligations well within the guidelines for the type of loan you are seeking?
Debt-to-income (DTI) is one of the factors that mortgage underwriters use to ensure that applicants will be able to repay their home loan on time. While certain factors, such as having a large down payment or excellent credit can be a factor in determining an acceptable DTI, the recommended ratios used in the mortgage industry currently range from 28 to 36 percent.
Will your bank records show good money management skills?
Another factor that mortgage lenders want to see from their applicants is an ongoing record of good money management. Bank statements that show overdrafts and frequent low balances can create red flags and prevent mortgage applications from being approved. Prospective buyers can avoid this type of problem by reviewing their bank statements carefully and then taking steps to correct any poor money management issues.
Does your employment record meet mortgage guidelines?
Your mortgage broker is required to verify your employment history as part of the loan qualification process. In addition to having adequate employment to repay the mortgage, borrowers will need to have a work history with no gaps that could raise questions about the stability of their income. In addition to providing proof, such as pay stubs or income tax records at the time of application, mortgage underwriters will also verify employment status as part of the final underwriting process before actually funding the mortgage.
For more information on the mortgage application process and what you can do to ensure good results, prospective home buyers should make an appointment with a reputable mortgage broker in their area. These professionals can offer suggestions that will help ensure that your home ownership dreams can come true.