The stacks of conditions you will have to get through for mortgage underwriting can be an overwhelming sight for many, and rightfully so.
Automation of the mortgage process has now made it easier to surface analyze applications based on a standardized system. There are several layers in mortgage underwriting which need to be dealt with.
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A machine is fed all your data so that it can make a completely theoretical judgment regarding your ability to repay the loan.
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You will have to provide the respective paperwork that shows your assets and income.
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You will be liable to show any document which could act as a setback in your ability to repay the loan, such as a business crunch, a divorce decree etc.
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You will have to bring the down payment to officially close the deal, and also close off any credit account etc. which may hinder your ability to pay the loan later on.
With all these legal documents you now have piled up, it is time to figure out how you make your case an acceptable one for the lender.
1. Do Not Add to Credit Balances
This is more important than you may think because your credit score is a constantly changing entity and you need to make sure it does not show signs of deterioration while you are in the process of closing a deal. Between the time that you sign the sale agreement and the closure of loan, make sure that your credit balances stay firm.
During this time of 1-2 months, try to make purchases using cash.
2. Credit Repair
Mortgage conditions will often revolve around your credit score, and sometimes you have no control over the errors and omissions that occur in that official document. This is where you have to contact services for credit repair and holistically review all the information which is present on the report.
If you find an item which you are sure you negated with a positive credit transaction then use the repair service to obtain your rightful score.
3. Mortgage Approval
Before closing the loan deal, it may be a good idea to get it pre-approved from a loan officer who can inform you of how convincing your application looks and what kind of packages you will qualify for. If you manage this scrutiny well before your loan application goes into processing, you will have a greater chance of getting a good package.
4. File Legal Documents
Keep one file at your present residency which has all your tax returns, legal payments, fee and utility bills etc. Time and time again you will be asked for these documents and flapping around at that moment will be quite problematic. With this practice, you will have the option of reverting to ‘the file’ for your needs.
Lastly, you should know that the mortgage underwriters will try to support your application as much as possible because their payment relies on them getting an application cleared. Play smartly with nothing important camouflaged, and the loan becomes easier to obtain.
