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Mortgage lending in Catlin, Illinois is a big business. When you’re buying a new home, navigating the lending process can be frustrating and uncertain. Whether you’re a first-time home buyer or a seasoned pro, the lending process is always a course with many twists and turns. Here are 4 tips to help you prepare for the mortgage application process and keep your sanity. Get Your Paperwork in Order Lenders require a lot of paperwork. Not only will you need your paycheck stubs and W-2 forms and tax statements, you’ll need copies of your bank account statements, stock holdings, and more. If you’re self-employed, you may also need to provide additional proof of income. Before you fill out a mortgage application, check with your preferred lender to find out the exact types of paperwork you’ll need during the process. Keep these documents nearby because it’s more likely than not that you’ll need to send multiple copies on a whim. Figure Out How Much You Can Afford The lender will give you a figure of what they will lend you based on your application. Often, this figure is higher than what you should be spending on a home. Just because you’re approved for $250,000 doesn’t mean that’s what you should spend. Take a serious look at your budget and determine how much of a monthly payment you can afford after you take out all your expenses. Ideally, you want to keep your mortgage payment between 25%-35% of your monthly take-home pay. Work on Building Your Credit Is your credit in bad shape? While most people with sub-par credit can find a lender, the interest rate, points, and down payment needed to secure a loan can be quite expensive. If you have questionable credit, spend some time going over your credit report and fixing errors. If errors aren’t the problem, but your payment history has marred your report then you may need to give it time. Instead of buying a home at the moment, you may want to work on paying bills on time and increasing your credit score. Well-qualified buyers get the most competitive interest rates and can afford more house for less money. Don’t Make Big Purchases Did you get pre-approved for your loan? That’s great. Pre-approvals make you look like a serious buyer and strengthen your offers. Unfortunately, a pre-approval can quickly turn into a denial if you begin making large purchases that mess with your debt-to-income ratio and credit score. Avoid making big purchases that require credit before and during the lending approval process. Hold off until after your loan is closed and you have the keys to your new home in your hands. Don’t let fear of mortgage lending in Catlin Illinois stop you from becoming a homeowner. It’s true that the process never goes completely smooth, but when you prepare for the process you’ll always have a better outcome. Preparation, patience, and a good sense of your financial health will help you secure a loan that won’t leave you with buyer’s regret.
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