The mortgage approval process can be easy or it can be difficult; a lot depends on how prepared you are before you start the process. Loan Officers do their best in requesting the specific items needed for approval. However sometimes they do need to add to the list based on the documentation sent in from the borrower and if that happens try to be patient and know the Loan Officer is trying their best to make it as simple and easy as possible.
Your Financial Picture
Make sure you give your full financial picture when talking with your loan officer about getting a mortgage loan approval. Keeping things back will only delay the process. If you own any additional property; make sure you disclose that up front. Job history and income be honest as lenders will verify all this information. If you own part of a company, even a very small percentage; let the loan officer know upfront.
Lastly; if you’re trying to refinance or purchase a home as a primary or secondary residence but it’s really a non-owner occupied (rental) property be advised that you are breaking the law, can go to jail and it’s almost a near certainty the lender will eventually find out with all the verifications that go on during and after the process
Your Credit and Your Mortgage Rate
To obtain the best possible California mortgage rates for various loan products; make sure your credit score is actually where you think it is. Go online and obtain copy of your credit report with a true FICO credit score.
Know that the scores lenders will pull up will be different but they should be in the same ballpark. There are a ton of credit services that do there own scoring and usually that is WAY off. Try to get 3 scores directly from Trans Union, Equifax and Experian; that will give you a decent picture of your credit report.
Important credit score levels include 740 or higher, 700 and 680. If you have a credit score above 740 then a mortgage lender will typically quote you the best terms they have available for your loan scenario. Above a 700 is still good; you’ll see a difference the mortgage rate a Loan Officer quote (or the cost to do the loan might be higher) but it won’t be a significant difference unless you were doing a cash out refinance on a non-owner occupied property.
When you go below a 700 credit score you might want to start looking at the FHA home loan program. On Conventional loans your interest rate really starts to go up when you have a sub 700 credit score. Under the FHA home loan program you won’t run into that trouble unless your credit score is really low and/or the lender has an overlay for your credit score.
Send In Exactly What’s Needed
When the loan officer requests documentation; send in exactly what is asked for; not your interpretation on what’s needed. If you do have questions; be sure to ask for clarification. When a Loan Officer asks for tax returns for the mortgage approval; don’t just send in your W-2s if you receive them or 1 page of your tax return. Send in the entire tax return. And don’t black out any information because the loan officer will only request you resend the documentation with nothing blacked out.
Another example is bank statements. When a Loan Officer asks for two months of bank statements send in exactly that – you’r two most recent bank statements. Make sure to include all pages, front and back of each page. Don’t sent in a screen shot of your bank balance, don’t send in a recent transaction history or a letter from your bank saying how much money you have in your account. Just send in exactly what’s asked for and that will save you a lot of time down the road.
Conditions For Closing
When you receive your conditions for closing be sure to send them over in a timely manner. Unless it’s an unusual request try to send in any requested items within a few days to avoid delays.