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Mortgage Approval

Posted by  on Apr 16, 2009
 
The information you provide on a mortgage loan application will be verified by a credit report requested by the lender. Keep in mind that it is to your advantage to have data correct, right prior to filling out the loan application. If you have had credit problems, you should inform the lender. Lenders recognize that unemployment, illness, marital problems or other financial difficulties can temporarily impair your credit rating.

Make sure that you provide a written explanation of the circumstances regarding the problem to be included with the loan application. The lender must consider such a written explanation as part of the underwriting analysis. If the problem has been corrected and your payments have been made on time for a year or more, your credit will probably be judged as satisfactory. Chronic late payments, judgments or loan defaults, however, severely damage your credit standing and may prevent you from obtaining the financing you need to complete the purchase.

If you have been through bankruptcy or foreclosure proceedings within the past seven years, be prepared to give full details and copies of applicable documents regarding them.
In addition, you will be asked to explain the details if you are obligated to pay alimony, child support or separate maintenance. Such obligations are treated like debt payments by most lenders and will be part of the underwriting analysis.
In cases where closing is scheduled soon after approval, the lender may give you verbal approval. This is common, but make sure you understand the terms of the approval.

As soon as the approval letter has been received, you are assured the financing you need to complete the purchase of your home and you need to turn your attention to completing the details required for settlement.

Keep in mind the lender wants to make the loan. Loan underwriters are looking for ways to approve loans, not reject them. If you have come to the interview with the loan officer fully prepared and have provided good documentation, you have done a great deal to assure prompt processing of your application and approval of your loan.

You and the lender need to make sure that lines of communication are kept open. Your contact person may be the loan officer, but often it might be someone in the lender's loan processing department who can tell you the status of your application.

You should be accessible if the lender needs additional information or documents during processing. If you are from out of town, use your real estate agent as a contact, if necessary. Quick response to lender requests helps keep the process on schedule. In order to protect both you and the lender, mortgage loans require much more paperwork and legal documentation than an automobile or other installment loan, and lenders do not ask for more than is necessary.

Obtaining a mortgage loan need not be an ordeal that ruins the excitement of acquiring a new home. When buying a house, make sure that you find a Realtor to guide you through the process. The best way to do this is to have realtors compete for your business to see which one is best for you. Find a house that meets your needs and desires. Make an offer to the seller.

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