In this series we’re examining 5 steps to turning yourself into a more successful mortgage candidate. We’ve talked about the value of research, not necessarily to become an expert on the mortgage industry, but to become an expert on your own needs and preferences. The home buying and mortgage loan financing processes can seem complex and it’s important to understand what questions to ask to get the help you need. Now it’s time to formulate those questions.
Step Two: Ask Questions
If you don’t ask, you don’t know.
Picture this. You fill out your mortgage application and submit the documentation the mortgage company needs. Things like recent pay stubs, bank statements, photo ID, tax returns, W-2s, etc. In other words, kind of personal stuff. You’re not sure exactly why they need all of that but you want the approval so you can buy your house. “Thank you, we received your documentation,” they say. You sit back and wonder if you’ll have your mortgage approval by lunchtime.
Your first disappointment is in learning that it takes longer than a couple of hours to get through the mortgage process. Next, you learn that your intent to use that box of cash you’ve been saving up for the last year as down payment money isn’t a popular plan to the mortgage company. They’re asking whether you have other ways to pay those costs. Ways that can be documented. These misunderstandings are easily avoidable if you do some research on what happens during the mortgage process and ask questions about anything that remains unclear.
The mortgage process can go smoothly and quickly, and technology is playing a great role these days in speeding up what has been a lengthy process historically, but there are still important steps involved after you submit your application. Some of the steps have to do with documenting the security of your current financial standing and looking at your history of repaying debts. Other steps are in place to check that you aren’t trying to commit any kind of fraud or financial crime with this mortgage transaction. That may sound funny to most of us, but the mortgage industry is a big target for that sort of thing and extra caution is required.
Your loan officer and his or her team understand all of these factors and it’s their role to put your application package together completely and compliantly. The more they understand about your situation and your needs, the better they’ll be able to do that job and make sure you’re applying for the mortgage product that best fits your needs. The more you understand about how things work and what to expect, the more comfortable you’ll feel in those periods of time when you don’t have an answer yet, or when your mortgage team reaches out to you to get one more set of documents “…and quickly please.”
Your mortgage experience doesn’t have to be fraught with anxiety or delays due to misunderstandings. Ask about anything that you’re left confused or unsure over. Make sure you understand the answers you’re given. If you’re uncomfortable with anything, let your mortgage team know. And the next step and topic for next week… Accept Guidance!