Mortgage Application Tips
Filling out a mortgage application is an important but time-consuming process. Use these tips to make the process as painless as possible.
Before starting the mortgage application, make sure you have all the necessary paperwork in front of you. Documentation that is typically required includes W-2 forms for the last two years, recent paycheck stubs, your federal tax returns for the previous two years, cancelled checks for your current mortgage payments or rent, a list of your current creditors (including balance outstanding and minimum payment), and investment records.
Review your application to make sure all information is correct and accurate. Be certain that you will be reachable using the contact information you provide. Also, resist the urge to “exaggerate” on the mortgage application — lenders will demand proof of income and check your information thoroughly. And it is not in your interest to take out a larger mortgage than you can really afford.
Don’t fire off multiple mortgage applications at once. Do your homework before applying to find the best rate and then see the application through. Multiple inquiries to the credit bureau can harm your credit score and make finding a good rate more difficult.
Make sure you keep a copy of your completed mortgage application for your records.
If your mortgage application is rejected, do not panic. First, find out why your application was rejected. Lenders are required to explain in writing within 30 days why the application was denied. Depending on the reason for turndown, you may be able to improve your odds for your next application by paying down debt or raising your credit score by paying bills on time for a period of time. Next, don’t give up! Just because one lender turned you down doesn’t mean they all will. Every mortgage company has its own unique underwriting criteria. Keep shopping around, and perhaps consider using a mortgage broker to help you find the best lender for you.