A lot has been written about President Trump’s plan for "extreme vetting" of immigrants and refugees in the last month or so, but there is one other form of extreme vetting that is important to understand for potential home buyers: the mortgage application.
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Decades ago, applying for a home mortgage was simple. There were just a few forms you needed to fill out along with supplying a few personal financial documents, and that was it! You have your own home! Today, post financial crisis, things are obviously a bit different. Lenders require a significant amount of documentation just to verify you are who you say you are, not to mention all of the financial documents you need just to get your mortgage application approved. Here are a few tips on surviving the extreme vetting that goes into a typical home loan application:
Talk to A Loan Officer Before You Buy!
It’s true, loan officers are salespeople trying to sell you a product and many people are afraid of pushy sales pitches before they are ready to apply. Your loan officer is probably the greatest source of information and advice you will find – other than this blog of course! Loan officers are familiar with the entire loan process from beginning to end. They can give you an idea of how it works, the products that would be best suited for you, and what you need to do to get ready to shop for homes.
Get Pre-Qualified OR Pre-Approved
The differences between pre-qualification and pre-approval vary based on what lender or realtor, you talk to. Many real estate agents will advise their clients to get pre-qualified or pre-approved by a lender before they go home shopping. Pre-qualification is generally the first part of the process, and it is a quick review of your financial situation. Pre-approval, however, is where a lender takes a deeper look into your financials and may have you fill out an actual application. The most important thing to understand about getting a prequalification or preapproval letter is that it is not a guarantee that your loan will close, but it is a good idea to start the process before you start making offers on homes.
Make Sure You Talk to More Than One Lender
Every lender is different, so it is important to talk with more than just the first one you meet. Even if you get pre-approved by one lender, you can still choose to apply with others. Buying a home is an expensive endeavor, so it pays to shop around!