Is there anything else I need to do? Is there some things that I need to be careful about so I don't hurt the application process? The answer is "Yes," below I'll explain.
Mortgages applications can take some time. Depending on how quickly the other parties respond it could take a week or even longer.
With so many lenders to choose from, you want to be sure and select the right one.
Some of the forms you’ll have signed allow them to check with your
employer, to verify how long you have worked there and the prospect of
The lender will need to be sure you can pay back the loan so a good employment history is an important part of your file.
Other things need to be considered also. The type of mortgage you’re applying for, the location of the home etc. So don’t be in a hurry as they do their job.
But there are some things you should look for. Let me explain what those are.
Within 3 days after the mortgage application has been signed, you will get a Good Faith Estimate (GFE) and Truth in Lending (TIL) form. The GFE will be a complete breakdown of all your closing costs and escrow charges.
Over the course of time you may get a few more of these documents. Why? Well let's say the house you made an offer on does not go through, are you done? No, you're going to make an offer on another house.
Each time you write a new offer the mortgage professional should provide you a new GFE and TIL. It’s the law so be sure to ask for it because some folks get lazy at this point.
The TIL is a Federal form that lenders must give you that is a statement of your total costs including your finance charges. This form will give you an Annual Percentage Rate (APR).
Do not get confused with this APR. It’s not your interest rate that you’ll end up paying. To comply with Federal Guidelines you get this form to inform you of the overall costs of the loan for the entire amortization period.
Now, if you filled out an online mortgage application, you may have to provide your email address. It may be possible to send you these documents via email for you to review. They will probably be a PDF document, so you will have to have a PDF reader on your computer. Adobe document reader is good one to use.
These are all documents you should review while you're waiting for the approval. Now let's talk about what not to do after you started the process. This is just as important!
Something to keep in mind after the mortgage application and once your home loan has been approved, don’t go out and buy any new items using your credit. Many lenders run a credit check again just before closing to be sure your credit is still intact before finalizing the loan with you.
I’ve seen people go and buy a new car just before closing. Even though I told them not to do so, it destroyed their chance of getting the home they wanted.
Why? Now their debt ratio was off and they could not afford the house according to the lending guidelines.
Another case I’ve seen, the person was all approved for their loan. They had an accepted offer to purchase his dream home. Then unknown to him, a previous landlord filed a judgment on him for a years worth of back rent.
Over $5,000 was now against him on his credit report. And all of this, just before getting to the closing table.
So I’m sharing these stories with you to help in your education. If you get denied later for a loan you were once approved for, the reason may be something you did earlier.
So then, after the mortgage application many things are going on behind the scenes. All of them are for the sole purpose of helping you get the mortgage for your new home loan.
I want to see you get the loan, so don't take any actions that can hurt the process before closing!
Good Faith Estimate Explained is an awesome video explaining how to read the GFE. Since this is an important document in the process, its good to learn how to read it.
If you haven't filled out an application yet and would like to, click here to apply online.
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