Mortgage Application Process
If you are in the process of a mortgage application and are hoping to close as soon as you can, there are steps you can take as a borrower to help ensure a smooth, delay-free process.
1. Continue Paying All of Your Bills on Time
Your credit history is one of the most vital elements of your mortgage application. Some loans may ask that lenders re-pull credit before the loan process is complete.
For example, if you are applying for a conventional loan, your credit will likely be pulled again before your loan is funded. The lender needs to verify that your credit score still falls within the required parameters.
If you fall behind and forget to pay bills on time, your credit score could drop. This could increase your interest rate or even make you ineligible for a loan. Even if you’re in the process of refinancing and will reduce your credit card debt in the process, you must keep paying your bills and debts as scheduled.
2. Avoid Opening Any New Lines of Credit during the Loan Approval Process
Between your initial loan approval and its closing, avoid opening any new lines of credit.
Any new liabilities will need to be verified and added into your debt-to-income (DTI) ratio — or the ratio that shows your ability to pay monthly payments. Each new line of credit adds an inquiry to your credit report, which could lower your credit score and affect your eligibility.
If you need to open a new credit card, auto loan, personal loan, or another line of credit while you’re getting a loan, disclose this to your lender. You may need to provide a Letter of Explanation for the new line of credit.
3. Schedule Your Appraisal ASAP
When Meridian contacts you to set up your appraisal, schedule the appointment as soon as you can. Even if a game of phone-tag occurs, do your best to get in touch with your appraiser over the phone or email as soon as possible. The appraisal process can take up to a week or longer to complete, so the sooner the process starts, the better.
When selecting a time to meet, be aware that evening and weekend appointments may not be an option. Since appraisers take pictures of your residence, daylight will help them see all elements of your property when they review your file in their office. If you are unavailable during the day of the appraisal, someone else you trust can let the appraiser in.
For more tips about scheduling an appraisal, check out our blog:
4. Provide Whatever Paperwork the Lender Asks for in a Timely Fashion
Part of the lender’s job is to review your financial history to see if you are a good candidate for their loan programs. To verify that your financial background aligns with your specific loan’s criteria, you need to provide the lender with paperwork and documentation.
As our specialists review your paperwork, they may find errors, missing documents, or readability issues. Please send over corrections and an additional paperwork requests as soon as possible to keep the wheels turning on your loan.
The faster you submit your documents, the quicker the mortgage process will be and the sooner your loan will close.
5. If You Switch Jobs, Inform Your Lender
Your lender will verify your employment before funds are issued on your loan. The longer you’re at a job, the better. This sends a strong signal to the lender that you have income stability and can predictably pay off your loan.
However, there are times when a new job opportunity presents itself. Be aware that switching jobs during the loan process has an impact on your loan application. In general, if you’re in the loan application process, try to avoid switching jobs until your loan is funded.
If you change jobs within the same field for equal or more pay, the underwriter will require more time and paperwork to verify your financial status. However, if you jump to a different career field, your loan may not close because the lender does not have records of how stable your employment is in that new field.
Be sure to tell your mortgage representative before accepting a new offer. The more they know, the more they can work with you and tell you how it might affect your mortgage approval.
Meridian Home Mortgage is committed to keeping the mortgage process smooth and simple for each of our customers. We are here to help you every step of the way.