Every home buyer is unique and has their own set of priorities when it comes to what they’re looking for in a mortgage.  You have some that want to keep their monthly payments as low as possible.  Some buyers don’t like surprises so they want to make sure that their mortgage payment never changes over the life of the Loan.  Still others decide on a particular loan knowing that they will sell in a couple of years.  Whether you’re choosing a fixed rate or adjustable loan, discuss you’re individual needs with your loan officer and they will advise you on which route to take.

At this point in the process, you have already become pre-approved and now you are under contract for your new home.  One of the provisions of every real estate contract states that the buyer should receive full loan approval in a specified amount of time (usually 7 to 10 days). 

If you haven’t done this already, you will need to provide your loan officer a number of documents needed to complete the loan process and get approval.

• Paycheck stubs for the last 30 days
• W-2 forms for the last 2 years
• Information regarding long term debts like student loans, car loans, etc.
• Recent bank statements
• Tax returns for the last 2 years if you’re self-employed
• Proof of any supplemental income

The last phase of approval will involve the appraisal of the home.  Your lender will need to know that the value of the property is equal to or greater than your loan amount.  I’ll talk more about the appraisal in the next step of this series.

Work Closely with Your Lender

During the time from contract to close, there are a few responsibilities that you’ll have in order for your loan to be processed and closed on time.

Respond quickly.  Your loan officer and their underwriter will need additional information and documents in order to approve your loan.  It’s so important to get them what they need as quickly as you possibly can to avoid any possible delays.

Keep excellent financial records.  It’s best to avoid any major financial decisions while waiting to close.  Just maintain normal spending habits and paycheck deposits because when you are nearing closing time, your lender will want to see another copy of your bank statement.  If you have an unusually large deposit or big purchase, the underwriter may want an explanation.  And, by all means, don’t quit or change your job during this time!

Hold steady on your credit score.  It’s crucial to not do anything out of the ordinary regarding your credit.  Don’t apply for any new credit.  Don’t increase your credit debt.  Don’t even close any credit accounts at this point.  Wait until after you close to buy that new couch for the home and you’ll be glad you did.

By following these full simple rules regarding full mortgage approval, you’ll be prepared to get the keys to your new home.  Contact me for all of your real estate needs in Baldwin County.

Jeff Nelson
IXL Real Estate – Eastern Shore
251-654-2523
[email protected]

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