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6 Tips to Help With the Mortgage Process

kids move boxes together while military family unpacks after a PCS move

This September, we’re celebrating National Mortgage Professionals Month. At Armed Forces Bank, we’re proud to serve our community of service members by offering a variety of mortgage options in order to help you and your family purchase a home. But getting a mortgage can feel intimidating. With our dedicated team, we’re here to help make the process go as smoothly as possible.

Here are six of our best tips.

1. Understand the Process

Buying a house can feel very overwhelming -- especially if you’ve never done it before. But even for those who have bought a house before, you might be hard-pressed to find someone who would tell you they love the homebuying process.

One way to make it easier is by becoming familiar with the process and looking at the steps, in the order you’re likely to face them. Taking it in smaller pieces can make it feel simpler.

Of course, the steps may vary based on your own personal situation. But in general, here’s what you can likely expect:

  • You apply for the loan and submit the necessary documentation.
  • Your loan is created with your lender during the mortgage origination process.
  • An underwriter will review your submitted documents. They’ll check for any risks based on your financial history.
  • Your loan will be approved or denied. In some cases, it may be contingent on you meeting certain requirements.
  • Finally, you’ll close on the home. This final signing of paperwork generally takes place at your lender’s office, the title company’s office, or an attorney’s office.

2. Don’t Forget to Budget

Budgets are important in regular life -- and this is true when it comes to making a big purchase such as a home, as well. You may have already decided how much you can afford to spend on a home. But you might be surprised about how other fees and costs during the process can really add up.

These are also known as closing costs. Typical closing costs include: the loan application fee, title and/or attorney fees, escrow fees, mortgage origination charge, courier fees, and more.

In 2019, the average American paid approximately $5,749 in closing costs in 2019, according to data by ClosingCorp. So be sure to factor these additional costs into your budget.

3. Prepare Your Paperwork

What Happens after you submit your loan application? Typically, your lender will come back to you and ask for supporting documentation. This includes information on your finances, such as bank statements, paystubs, proof of assets, and more. You also may need to send a copy of your photo ID.

In general, it can take quite a bit of time to track down all these documents; though if you’re used to PCS moves, you may have all of these files safely stored and easily accessible already. No matter the situation, gathering it all as early as possible can help it feel like less of a scramble when the time comes.

It may even help to ensure you have all of the necessary paperwork before you even submit your initial loan application. That way, you know you’ll be ready.

4. Watch Your Credit Score

Before and during the mortgage application process, you’ll want to ensure your credit score is as high as you can get it. The better your credit score, the better interest rates you may be eligible for.

No one wants to be surprised by their finances. That means you’ll want to make sure you pay attention to your credit report. You can request a free copy of your credit report from each of the three main credit bureaus -- Equifax, Experian, and TransUnion -- once per year.

Keep in mind that, as a result of the COVID-19 pandemic, you can request a free report each week through April 2022.

If you notice errors or fraudulent charges on your credit report, be sure to get them cleared up as soon as you can before submitting your application for your loan. That can help make the approval process go more smoothly.

5. Make Good Financial Decisions

Lenders will consider more than just your credit score when looking at your mortgage application. They’ll also consider something called your debt-to-income ratio, or your DTI. If your debt-to-income ratio is too high, you might not be approved for the mortgage.

Doing your best to pay down debts before applying for your mortgage can help you feel more confident about getting approved.

Also, try to avoid making any big purchases around the same time you’re applying for a mortgage. Whether it’s a car, a boat, or something else, you want to make sure it doesn’t impact your financial picture in the eyes of your lender -- or contribute to a higher DTI.

6. Be Responsive to Your Lender

Open channels of communication between any two parties can make things go more smoothly -- it doesn’t matter whether it’s your partner, your best friend, or your mortgage lender.

Your lender is there to help facilitate your mortgage process, so be sure to respond in a timely manner if they contact you with requests for additional information or supporting documents.

Having a good relationship with your lender can help you feel more confident during the homebuying process.

This is why you’ll want to be sure you choose a lender that not only meets your financial needs, but will also help you work through everything.

Armed Forces Bank Will Walk You Through It

Even when it feels overwhelming, Armed Forces Bank is committed to being by your side throughout the mortgage process. We offer a variety of loans -- and be sure to ask us about our $1,000* closing guarantee.

And our loan advisors are specialized when it comes to working with military families. You can trust us at Armed Forces Bank.

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