Preparing Your Mortgage Application 

Buying a home in the current market is no easy feat. Even in a market more suitable for buyers, you will need to prepare numerous documents and details to apply for a mortgage and purchase a property.  

Using a tool like a mortgage application checklist or general home buying checklist will help you prepare the items you need to embark on this journey. Innago’s mortgage application checklist includes all the documents, identification, and other information you’ll need to supply to your lender to apply for a mortgage. If you’re ready to begin, download a free pdf copy of our mortgage application / home buying process checklist above. 

Benefits of Being Prepared for the Mortgage Application Process 

Although filling out an initial application for a mortgage might feel like Step 1, there are several benefits to learning what the process entails in advance. Below are just a few of the benefits of advanced preparation before applying for a mortgage.

1. Faster Processing Time

One of the most immediate benefits of being well-prepared is a faster processing time. Lenders require a variety of documents, including proof of income, tax returns, bank statements, and details about your current debts. Having these documents ready can help you avoid delays and keep your application moving forward. The quicker your mortgage application is processed, the sooner you can lock in a good interest rate and move into your new home.

2. Better Negotiation Power

When you’re prepared, you’re in a stronger position to negotiate. With all the necessary information at hand, you can have a more informed discussion with lenders about rates, terms, and other conditions. For example, if you’ve checked your credit ahead of time and know that you have several late payments on your report, you can come prepared with a letter of explanation and a strong argument for why you won’t default on your payments in the future. This preparation shows lenders that you are a serious and reliable borrower, which can lead to better deals and lower interest rates.

3. Fewer Unpleasant Surprises

Preparation helps you anticipate any potential roadblocks that could affect your application. By reviewing your credit report, understanding your financial standing, and knowing exactly what you can afford, you minimize the risk of unpleasant surprises during the mortgage process (like discovering you can’t afford the dream home you wanted).

4. Reduced Stress and Anxiety

The mortgage process is inherently stressful, but being organized and prepared can help you feel more in control. Knowing that you have all your documents in order and a clear understanding of the requirements can reduce anxiety and help you navigate the process with confidence. This level of preparedness allows you to focus on finding the right home and making the best decision for your future.

5. Time to Improve Your Financial Standing

Finally, preparation can give you time to improve your financial standing if needed. The process of gathering your financial documents, reviewing your credit report, and calculating your budget can help you better understand your financial health. This understanding allows you to make more informed decisions about how much you can borrow and what type of mortgage is best for your situation. 

Other Tips for the Home Buying Process 

Completing a mortgage loan application checklist to ensure your documentation is prepared is only part of the process of securing a mortgage. There are many other steps in the home buying journey that involve careful research and consideration. Below are a few of our most crucial tips for your home buying journey.

1. Shop Around for Lenders

There is much variation in what different lenders offer, so to get the best rate, it’s usually necessary to compare several lenders and their offerings. Lenders might have slightly different application and underwriting requirements, so stay in touch with your loan officer to ensure you include everything you need in your application.

2. Find a Trusted Real Estate Agent

Experienced real estate agents will make your house hunting journey much smoother. Agents have access to newly listed homes and professional insights that buyers typically don’t have. However, it’s important to find a real estate agent that you can trust. Their job is to find homes that fit your preferences, so be sure that whoever you choose fully understands your needs.  

To find a good real estate agent, ask your home-owning friends and family if they know anyone they can refer to you. It can also be a good idea to read reviews and personal testimonials online before settling on an agent to represent you. 

3. Negotiate

Once you’ve looked at numerous listings with your real estate agent and decided on your dream home, make an offer and be sure to negotiate. Your agent or realtor will take the lead in this process, but the factors they will consider include the asking price, the local housing market, how long the home has been on the market, and whether the seller is considering other offers.  

Negotiation will commence once the seller declines or counters your offer. Before you close, however, be sure to schedule a home inspection and appraisal to ensure that the property doesn’t have any glaring issues. You can also consider writing contingencies into the purchase agreement for these items if needed. For instance, many contracts include inspection or appraisal contingencies that allow the buyer to back out of the purchase (or negotiate better terms) if the home inspection reveals undisclosed issues or the property fails to appraise for at least its purchase price. Ask your agent which contingencies make sense to include in your contract. 

Conclusion 

The home buying process is a long and sometimes trying one, but it’s all worth it once you finally sign the purchase contract and make your new property official. Download Innago’s mortgage loan application checklist to help make your home buying journey as seamless as possible.