ADMINISTRATIVE PROCEDURES
Once you settle for the property you’d like to buy and have come to a consensus with the seller, you are in an excellent position to apply for a mortgage.
Applying for a mortgage in the US is more elaborate in the verification process. And while this may sound daunting, it’s pretty simple if you follow the proper steps. Let’s dive right in and discover how you can have your mortgage application approved.
What Is a Mortgage?
A mortgage is a loan to home and property buyers to help them purchase the property they want. This financial aid allows you to close the deal on a property if you do not have enough money to pay for it from your savings.
Applicants receive a lump sum of money and pay off the realtor, then repay the loan in consistent monthly installments for a particular period before clearing the debt.
Qualification Criteria and Why You May Need to Apply for One
Before approving your mortgage application, the lender has to ascertain that you fulfill particular requirements. A good credit score is top on the list of what you must have. The lender needs assurance that you are not a defaulter, which is the primary way to convince them you have a clean repayment record.
Your income and assets are also vital things that help you land a mortgage. A steady income source and assets reflect consistency in payment when you get the loan and the availability of a backup plan that can be used to collect a bad debt.
The debt-to-income ratio also contributes to increasing your chances of getting this loan. The property type you choose (primary residence or secondary property) heavily determines your DTI ratio, so you should consider this factor before applying for a mortgage. You may want to source a mortgage if you do not have the money to pay for the house or need to top up on what you have.
Requirements And Documentation Needed
When applying for this loan, the bank will require you to produce particular documents to facilitate the approval process, which includes:
- • Your W-2s for the past two years.
- • Pay stubs for the last 30 days.
- • Bank statements for all your active accounts for the last two months.
- • Tax return statements that are signed.
- • Profit and loss statement copies for the past year for self-employed people.
- • Photocopy of a signed purchase and sales agreement.
- • Government-issued identification document.
- • Verifiable employment history.
- • Credit score details.
- • Any other required documents depending on the type of mortgage you want.
When preparing for a mortgage application, you must ensure you have all the documents required. Ascertain they are signed and stamped where necessary and up-to-date. Get acquainted with the latest borrowing laws, which will help acquire the best experience.
Remember to search for competitors to give you leverage when you apply for the loan.
Where and How to Apply
Application options vary depending on the bank you choose. However, most provide online application options. You only have to upload the required documents and pass the eligibility criteria to approve the application. You may have to visit the bank in person to sign the agreement copies even after an online application. Depending on the financier, phone, mail, and in-person mortgage applications are also available.
When using online, in-person, and mail application options, you must fill out the required forms and attach the necessary documents before submitting the request. You can find more information and resources on this topic here.
Calculating Your Mortgage
You can calculate the mortgage from the comfort of your home with the help of a mortgage calculator. Visit your preferred bank’s website and use the available calculator on the website. You can also contact the support team for help with calculating your mortgage. Here you can check an example.
What You Should Do If It’s Declined
Getting approved depends on how clean your application is. You get a better shot at receiving the loan if you provide all the necessary details when requested. If you think there is something important that may jeopardize the application, you’re better off mentioning it to the loaning manager upfront. Sadly, not all mortgage applications get approved, so if yours doesn’t go through, you can appeal the decision, apply to another bank or work on your eligibility criteria and apply later.
Getting Your Mortgage Statement
After you receive your loan, you should ask the bank to send you a bmortgage statement. This document contains all your mortgage details, including the current debt amount, interest rate, and a breakdown of your payments. The bank should provide this monthly to help you track your payment progress.
Validity and Processing Time
The validity of a mortgage depends on the repayment period. However, individuals who default the payment without discussing readjustment options with the bank can shorten the validity period, making the bank move in and repossess the property or other assets to recover their money.
Typically, it takes 30 days to process the loan, but it could take longer if there are complications during the application process.