Buying a home can sometimes feel overwhelming, especially if it’s your first time. Fortunately, there are many ways to make the process less anxiety-producing. Let’s review seven tips for making the mortgage application process less stressful.
1. Check Your Credit Report in Advance
Your credit score will be an important factor in purchasing a home. In fact, it’s one of the reasons why many people feel anxiety and stress during the mortgage application process. This is often because they don’t know what to expect regarding their credit score. If you have had any issues, it’s best to find out about them before submitting an application. This can be done easily through the major credit bureaus, Experian, Equifax, and TransUnion.2. Take Time to Improve Your Credit Score
Once you have received your credit score, it’s a good idea to work towards improving it. Quite frankly, you can never have a credit score that’s too high. The best way to go about doing this is by removing any existing discrepancies. It’s common to find errors on a credit report, which can make a significant difference. Sometimes, there are old issues that were resolved and can be removed by submitting a request to the credit bureau in writing.3. Save Money
One of the best things you can do when applying for a mortgage is to save money. You might be surprised by how many things you can do to save money. For instance, if you’re accustomed to going out for dinner several times a week, you can reduce it to once a week or once a month to increase the money in your savings account. Fortunately, some banks offer low-deposit homes, so you don’t have to spend as much money to secure your first home or the home of your dreams.4. Don’t Get New Credit Cards
Opening a new line of credit before applying for a mortgage would be a mistake because it demonstrates to the lending institution that there is a higher risk. There’s also a chance that it will lower your credit score. For starters, the inquiry by the credit card company will cause your credit score to drop slightly and it will take time for it to rise. While there is no need to close existing credit card accounts that you pay on time, you should not get a new line of credit.5. Don’t Buy Anything On Credit
If you have credit cards, avoiding using them before applying for a mortgage is best. It’s an excellent way to demonstrate that you are financially stable and don’t need to buy things on credit. The mortgage company will calculate your debt utilization ratio, which means using your credit cards while applying for a mortgage will increase that number. In addition to not buying anything on credit for a while, you also should not purchase anything significant, like a new car.6. Pay Everything On Time
It goes without saying that you should be more meticulous than ever about paying everything on time when you apply for a mortgage. This includes your utilities, phone bill, and everything else that can possibly show up on your credit report. A late payment is bad, but a recent late payment could be the reason why a loan is not approved.7. Anticipate a Request for Financial Documents
The mortgage application process will include a request for many different financial documents. This will consist of bank statements and information to support your income. To make the process easy, you should anticipate the need to provide these documents in a timely manner. This is important because the quicker you can respond to a request, the easier the lending process. Some banks make the mortgage application process accessible by allowing you to provide information electronically.Following these tips should be a priority if you want to make the mortgage application process less stressful.
