Home Loan: Tips for a Smooth Application from Start to Close
Check out this article of tips and best practices when it comes to applying for your home loan from start to close!
In this article:
- Tips on how to ensure a smooth and fast application in a competitive home market.
- Lenders take in to account every thing you do financially up until the time you sign the closing papers.
- Mistakes to avoid during loan processing that can slow down your closing date.
How to Have a Smooth Home Loan Application
Whether you’re buying or building, there a few things we can do to make sure your application goes as smooth as possible. Outside factors are hard to control but we have learned a thing or two over the years about what we can control together. Below are tips and tricks from start to close that will get you lounging in your home as quickly as possible.
Pre-qualification and Application Phase
Provide as much information as possible.The faster we get all the needed documents to verify the application, the faster we can move the loan through the process.
It’s also important for us to understand the full picture. If something wasn’t discussed or disclosed early on, we risk slowing the process down in order to adjust appropriately. What might not seem important to disclose to your lender, might hinder their ability to get you to close quickly. Transparency is key.
Time is of the essence. Every day counts, especially in a competitive home market. Being diligent with exchanging important documents like official contracts and forms with signatures, allow us and the other businesses and departments we coordinate with time to get everything that is needed in order to close. By exchanging documents quickly we also ensure extra time needed to solve any hiccups we might encounter.
Page numbers matter. When you provide us with the necessary documents needed to complete your application, we are legally required to have the full document – even if the last page is blank. It might make sense to leave off page 8 of 8 because there is nothing on it, but we have to show that we have reached the end of the document. Make sure to include all pages, even the blank ones.
Processing and Waiting to Close
Many buyers view the loan application procedure as a static action - a snapshot of their financial lives at a given moment in time. For lenders this is actually an ongoing process that takes in account every thing you do financially up until the time you sign the closing papers. If you have doubts about doing anything while your loan is in the processing phase, please consult your lender before you do it. Often times, buyers don’t realize the following could slow down the loan closing process:
Ask your lender before you make any major financial changes. Even something that is seemingly positive, like paying off a credit card, could affect your approval status. Avoid closing credit accounts, transferring balances, or paying off collections. Any changes done while in the processing phase will at the very least require more paperwork, which could hinder your closing date.
Avoid taking on new debt. Taking on new debt while your loan is processing will lower your credit score and could impact your qualification for the amount approved. We recommend to avoid opening any new lines of credit while your loan is processing.
Keep your debt-to-income ratio in mind. It can be smart to build your credit by using credit cards every month. Just make sure not to do anything atypical, like buying a larger-than-normal purchase, until your loan closes. An increase in debt could throw off your debt-to-income ratio forcing your lender to readjust.
Be careful of employment changes. Any changes to your compensation, like a change of employer or even a change in jobs at your current company, could slow down the closing process. If you happen to find yourself in this situation, we recommend discussing with your lender as quickly as possible so you can work through the changes together.
If you have questions about the home loan process from start to close, please contact us or call 844.AGSOUTH!