Preparing for a home loan can save you a lot of time, money and frustration. Those who have gone through the process already, know how uncomfortable it can be to reveal private details about one’s personal finances to a complete stranger. Although there’s not much you can do to avoid having to reveal such personal information, you can at least make the process as quick as possible by following these quick tips:
1. Monitor your credit score for free at Credit Karma. This free service is not a temporary trial, there is no credit card required, it is not a scam, and they don’t offer you a basic service in hopes of having you buy their premium offering. They make their money in hopes that you will consider using one of their preferred vendors when shopping around for a loan. If you don’t have good credit, spending some time fixing it before applying for a loan, could save you thousands of dollars in interest charges for a 30 year loan. Your credit score is going to be one of the major influences in your application process.
2. Research the type of loan the fits your needs. Mortgage loans come in many different flavors. The government has many programs to help new home owners, the most common being VA and FHA. Other government programs might only be available in your area. For example, some local governments with high demand for assistance, dole out their funds in the form of lotteries, tax abatements, and one percent financing. Generally speaking, he better the deal, the more effort you will end up having to put forth in order to get it. These deals are commonly poorly advertised by local governments, they involve application deadlines, mandatory classes or long waiting periods. One place to start your search is on the website which lists programs that apply nationwide. Your next best bet is to look up your state, county and local government sites as well. Look through any sections that mention real estate, housing, etc. If you’re not in a hurry, start your process a year ahead time in order to give yourself time to increase your credit score and search for these deals.
3. Buy a few folders and keep yourself organized. Nothing will waste more of your time than having to dig through loads of paperwork trying to find the information that your banker asks for. In general, they will often ask for two years worth of tax statements; two months worth of bank statements showing that you have had the down payment ready for at least that long; four weeks worth of pay-stubs; and two months worth of 401(k) statements. If you receive these statements by mail instead of online, then it can take some time to gather the required information. Having all this information ready will get the application process moving along faster.