The first big hurdle in the mortgage approval process is your credit score, which is a big determining factor in your mortgage. A low credit score could affect your interest rate, costs or even cause your application to get denied. Before you start the Lake of the Ozarks home loan process, be sure to review your credit report. Make sure you are aware of what your credit score is. Talk to your mortgage professional about correcting any mistakes that may have been made on your credit report and if there are any ways you can improve your score before you take the next step in the home buying process.
2. Have Your Documents in Order.
Your credit score is just one of the factors that a Lake of the Ozarks mortgage lender will take into account. Your lender is going to need documentation on your income, assets and monthly debt payments. Your debt-to-income ratio also plays an important role in the mortgage approval process. You can improve your chances by paying off some debts prior to applying for a mortgage loan. Talk this over with your mortgage lender at the Lake of the Ozarks first. However, if that's unrealistic, just ensure you don't take on any new debts while going through the mortgage process.
One of the first steps in the mortgage approval process is getting a pre-approval. It is very important to understand the differences between a pre-qualification and a pre-approval. A pre-qualification is a preliminary determination that you should be able to get approved, and this can be done at any time. The purpose is to determine how much of a loan you could be approved for and the down payment you would need to make; however, a pre-qualification is not binding, it's more of a hypothetical situation. A pre-approval is more attractive to sellers and real estate agents because it demonstrates that you would be a good candidate for loan approval because you've already done the necessary credit check and other financial evaluations. On a pre-approval, all your information and documentation has been obtained and reviewed by an underwriter to determine that you qualify for the loan program you applied for.
4. Don't Change Employers.
Once you've begun the mortgage approval process, be careful that your activities don't do anything to jeopardize it. Not opening any new credit accounts or taking on any new debt was mentioned earlier, but you also don't want any changes in income, which includes changing employers. Your lender wants to see a steady income from the same employer. Changing jobs, even if it's within the same industry and roughly the same pay or more, is not a good idea. You, and the lender, don't know if this new job is going to work out the way you expect it to. Refrain from making any changes to your job or income as it can have a major effect on your mortgage approval. Stability is very important in the mortgage approval process.
5. Have the Home Appraised.
The home appraisal plays a critical role in the mortgage approval process. A mortgage lender is not likely to lend more money than what the property is worth. If the appraisal determines that the property is not worth the asking price, you will either have to renegotiate with the seller, bring in additional funds at closing or find a different property.
If you're ready to start the mortgage approval process, give me a call today at 573-746-7211. When it comes to your Lake of the Ozarks home financing needs, I'm committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first-class service you deserve.
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Senior Loan Officer
NMLS #: 493712
4655 B Osage Beach Parkway
Osage Beach, MO 65065
Cell: (573) 216-7258
**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.