As summer comes to a close, ample loan funds are still available at low interest rates if you’re interested in buying a home. A buyer’s market exists in many parts of the city, with excellent properties in all price ranges and in all neighborhoods.
But even if you’ve experienced home buying in the past five years or so, you should know that the loan process has recently changed. Whether you are purchasing a new home or want to refinance an existing loan, there are a few things you should know to keep the process smooth and on track.
Understanding the New Mortgage Guidelines
Even though many things are the same – like house hunting on weekends and saving for a down payment well in advance of applying for a mortgage loan – there are new timelines and guidelines you must adhere to that will determine your options when purchasing or refinancing a home.
• Regulations have been introduced that could make the process longer, so plan to prepare for your purchase a couple of months in advance, especially if it is your first home.
• Make sure your credit is in pristine order so you can qualify for the best rates available.
• You may be asked to provide documentation like pay stubs and deposit account statements for verification. You may also be asked for additional documentation, such as recent tax returns.
• Once your credit and property conditions are satisfied, you should receive an “approval” and clearance to close on the loan. Then the actual closing is scheduled.
• Regulations require that lenders re-verify employment and your credit on either the day you are to close or on the day of loan funding, so make sure you have not incurred any new debt that could affect your loan qualification. Don’t change jobs or go out and buy that new car just before closing or funding your loan. If you do, your loan approval could be in jeopardy.
Other Factors to Keep in Mind
Part of the new requirements affect the many services ordered on your behalf during loan processing. This may add scheduling challenges, as lenders are required to work with independent appraisers, independent inspectors, etc.
Be informed at the beginning about what is expected during your application process, and be sure to ask questions along the way. Communicate often with your lender and ask for help in understanding your financial credit status. You might also want to ask about mortgage qualification calculators that can help save time by outlining your qualified home price range(s).
It’s important to be prepared before meeting with your lender, especially understanding your credit history and how it will affect your loan application.
Be sure to consider:
• Whether your credit standing is good, fair, poor or excellent
• Getting your credit score from Equifax, TransUnion or Experian
• Whether you are up-to-date on your rent or mortgage payments
• Whether you are up-to-date on your car and/or credit card payments
• Communicating any other payment or income information your lender should know about
• The length of time it takes to successfully complete loan processing and funding
Work Closely with Your Mortgage Expert
It is more important than ever to take care of your credit and monitor it often as you prepare to purchase a new home or refinance your current home. Be sure to find a mortgage lender who will work with you each step of the way to successfully maneuver you through the new application process. And remember that diligence in proper financial management and keeping your credit current and in good standing will help you achieve that “happily ever after” status in your new home.
Information for this article provided by Susan Stewart, president and CEO of SWBC Mortgage Corp., one of the largest private mortgage lenders in San Antonio. Inquiries can be directed to 210-826-6999 or swbcinfo@swbc.com.
