- Getting a home loan can be a long and complicated process.
- Would-be home buyers may want to take steps to simplify and speed it up.
- These steps include getting pre-approved and preparing your paperwork early.
Don't make getting a home loan harder than it has to be.
If you're buying a home, chances are good you'll be taking out a mortgage loan in order to afford it.
While mortgages are affordable loans and it usually makes sense to get this type of loan even if you can afford to pay cash for a home, it can be a complicated and slow process to obtain one. That's because there are a lot of financial hoops you must jump through, and banks don't always work quickly.
The good news is, there are ways to simplify the process of obtaining a mortgage that's right for you. By taking these four steps, you can streamline the loan application and approval process and get your home loan with minimum hassle.
1. Get pre-approved
Pre-approval is the single best step you can take to make getting a mortgage quicker and easier. It involves submitting all of your financial documents upfront before finding a home you want to buy.
Your lender will let you know how much you can borrow and what rate you'll pay, and will write you a pre-approval letter you can include with a home offer. This will help you better understand the obligations you're taking on, and will reassure potential sellers you are likely to get the financing you need to move forward.
Pre-approval isn't necessarily a guarantee of financing, since things could still go wrong if the home doesn't appraise for enough or if your financial situation changes. But as long as all goes well, you will get the loan you've been pre-approved for, and moving toward closing will be much faster, so it's well worth taking this step.
2. Get your financial paperwork in order
You can expect to submit a lot of financial documents when you go through the mortgage approval process. This includes tax returns, as well as statements for financial accounts such as your bank and investment accounts. You'll also need proof of income.
If you get all these documents together early on, you'll be able to produce them quickly when lenders ask for them so you can get final approval for your mortgage loan much faster. And you won't be scrambling at the last minute to obtain documents that are holding up your closing.
3. Look for a lender that allows you to submit documents electronically
Many lenders allow you to go through the entire mortgage approval process online, including submitting your paperwork via the internet. This can make life much easier compared with having to visit a loan officer in person and provide physical printouts of all of your documents.
4. Opt for a remote closing
Finally, you should seriously consider asking for a remote closing. This will mean you get to sign all of the papers on your own time and at a location convenient to you rather than having to go to a lender's office.
You may need to visit a notary to sign your documents, but some lenders will actually send one to your home to handle the paperwork so you don't even have to leave at all.
By taking these four steps, you should be able to streamline the process of getting a mortgage, and your home-buying experience will end up a lot less stressful because of it.
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