Optimizing Your Home Buying Journey

Speeding up your home buying timeline can significantly change your overall homebuying experience, especially when equipped with the right knowledge and tools that bring you closer to a quicker closing. Fortunately, numerous strategies exist to streamline your mortgage transaction time. While these methods may not guarantee a completely hurdle-free experience, being well-informed will undeniably be beneficial.

Assembling Your Documents

Approval for a home loan necessitates proving to your lender that you meet the stipulated loan requirements. These can encompass a range of factors including annual income, credit score, existing assets, and more. Most lending institutions, such as CrossCountry Mortgage, require digital or physical copies of the following documents:

• Tax Returns
• Pay Stubs
• W-2s or other proof of income
• Bank Statements and other assets
• Credit History
• Gift Letters
• Photo ID
• Renting History

While this may seem like an extensive list, there's a silver lining: thorough paperwork makes lenders feel more secure in offering low mortgage interest rates. Compared to the more streamlined mortgage application process from fifteen or twenty years ago, which also involved higher interest rates, this system is much more advantageous. For instance, the average 30-year fixed-rate mortgage was 8.12 percent in the 1990s and 6.29 percent in the 2000s.

Understanding Your Credit Score in Advance

Rarely does one wake up one day and decide to purchase a home immediately. It takes time and effort to save for a down payment, gather the necessary documents, and locate the right real estate agent. Therefore, becoming acquainted with your credit score before making a home purchase decision is a smart move. An FTC study revealed that 1 in 5 consumers had errors on their credit reports that could negatively affect their scores and lead to less favorable loan terms. Luckily, you can rectify these errors before applying for a home loan. Another advantage of knowing your credit score is being aware of the loans you may qualify for. However, the minimum credit score requirements frequently change, especially in an unstable market. Therefore, consulting with multiple lenders to ascertain which loan suits your current credit score would be a prudent approach. If the prevailing loan interest rates don't match your financial capacity, you might need to postpone your home buying decision*.

Sidestepping Mortgage Pitfalls

Even after loan approval, certain actions can delay your transaction or disqualify you from the mortgage initially approved. Here are six recommendations to avoid common missteps:

Refrain from Large Purchases: Any new activity on your credit card could alter your approval conditions. This includes purchasing items like jewelry, cars, boats, furniture, and electronics.

Avoid Applying for New Credit: While avoiding purchases on your current credit cards, it's crucial to abstain from opening new credit lines. The application process could negatively impact your credit score, thus invalidating your previous score.

Bypass Large Deposits or Withdrawals: Significant movements outside of paycheck deposits could flag your account for review. If you're considering accepting a large cash gift for your new home, it's best to do so before applying for a loan.

Don't Change Your Job: If you foresee any job change while entering the loan process, notify your advisor immediately. Any job termination, transfer, or title change should also be promptly communicated.

Prioritize Communication: Balancing the relief of loan approval and the stress of searching for a new home can be challenging. Nonetheless, maintaining regular communication with all involved parties is crucial.

Ensure Prompt Bill Payments: Even during a transition between homes, it's essential to pay all bills on time. Make sure to finalize any service termination dates with your providers and check multiple times to avoid any confusion.

At CrossCountry Mortgage, we're dedicated to making the mortgage process as smooth and stress-free as possible. Contact us today for more information!

*Before making a purchase decision or deciding to wait, always consult with a lender about your specific mortgage options.