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How to Shorten Your Mortgage Transaction Time

Tiffiny Taylor,  Branch Manager/Sr. Mortgage Advisor

April 30, 2020 — 5 min read

It's incredible how fast your homebuying timeline can change when you have the right tools and knowledge to get you to the closing table faster. Luckily, there are plenty of things you can do to be prepared and help shorten your mortgage transaction time. There's no guarantee that you'll avoid all roadblocks, but it doesn't hurt to do your research.

Get Your Documents Together

To get approved for a home loan, your lender will need to verify that you meet the minimum requirements for the loan. This includes a variety of traits such as annual income, credit score, current assets, etc. Most lenders will require an electronic or hard copy of the following:
  • Tax Returns
  • Pay Stubs
  • W-2s (or other proof of income)
  • Bank Statements (and other assets)
  • Credit History
  • Gift Letters
  • Photo ID
  • Renting History
You may be wondering if all of this information is necessary. Well, the good news is that stricter paperwork means lenders, such as PacRes, feel more comfortable offering low mortgage interest rates. People who bought homes fifteen or twenty years ago experienced a more straightforward mortgage application process but also paid a higher interest rate. The average 30-year fixed-rate mortgage was 8.12 percent in the 1990s and 6.29 percent in the 2000s.

Know Your Credit Score Ahead of Time

Most homebuyers don't wake up one morning and suddenly say, "I think I'll buy a house today." Saving up for a down payment, compiling the necessary documents, and finding the right real estate agent all take time and effort. So, before you decide that now is the time to buy, get familiar with your credit score. Did you know that in a recent study, the FTC noted that 1 in 5 consumers surveyed had errors in their credit reports that could impact their scores and result in less favorable terms for loans? You don't want to wait until the last minute to check your score. Thankfully, there are ways to report and fix these errors before applying for a home loan. Another benefit of being aware of your credit score is knowing which loans you may qualify for. However, minimum credit score requirements change often, especially in a volatile market. A good strategy would be to consult with multiple lenders and get an idea of what loan you could qualify for with your current credit score. If the existing loan interest rates aren't ideal for your financial standings, you may need to hold off on buying for now*.

Avoid the Mortgage Don'ts

Even after you get approved for a loan, there are still ways you can delay your transaction, or even disqualify you from the mortgage you were initially approved for. Here are six things we recommend you avoid.

Don't Buy a "Big Ticket" Item

Any new movement on your credit card could change the conditions of your approval. This would even include buying items such as jewelry, cars, boats, furniture, and electronics.

Don't Apply for Any New Credit

While you're avoiding any purchases on your current credit cards, it's essential that you also refrain from opening any new lines of credit. Your credit score will take a hit when you apply for the card, therefore making your previous score invalid.

Don't Make Large Deposits or Withdrawals

Any significant movement outside of paycheck deposits could flag your account for review. If family members or friends have mentioned "gifting" a large amount of cash to you for the new house, it's best to accept this gift before applying for a loan.

If the cash is given post-application, speak with an advisor about what could be considered an "unusual deposit period." Amerifirst says to evade any deposits greater than $200 outside of your regular income.

Don't Quit or Switch Your Job

Most promotions don't come out of the blue. If you're entering the loan process with any possible job change on the horizon, you need to notify your advisor as soon as you can. If you've been terminated, transferred, or had another title change, this is also cause for telling your advisor.

Don't Put Off Communication

We get it. Life can be crazy! The relief of loan approval with the chaos of looking for a new home can be overwhelming. Things will likely fall through the cracks. However, you must stick to the planned timeline.

Each person, from the lender to the inspector, is on a schedule (and so are you)! Save yourself the stress of getting things done last minute and stay on top of communication.

Don't Pay Any Bills Late

This may seem like common sense, but even if you're on your way out of one home and into another, all bills must still be paid on time. If you're turning off service in your current house, make sure the final billing date is clear to both you and your provider. It never hurts to triple check.

At PacRes, we strive to make the mortgage process as smooth and stress-free as possible. Contact us today for more information!

*Always speak to a lender about your specific mortgage options before buying or waiting to purchase.