Obtaining a mortgage in the spring and summer of 2020 while many areas begin to slowly open up after pandemic shutdowns means longer wait times for the underwriting process and final approval as well as much tighter qualification standards. Right now lenders are wading through mountains of mortgage applications that grow by the day while being extra cautious about where their limited open amount of lending funds go.
In the midst of a busy and crazy mortgage season, it is still possible to qualify for a mortgage loan at a good rate and not have to wait an overextended period to close on that mortgage. Here are some tips on how to do it.
Have a Thorough Knowledge of Your Own Personal Finances and Do Whatever You Can to Get Your Credit Score as High as Possible
One of the biggest mistakes a large number of borrowers are making right now is not being aware of their credit score, and the current qualifications. Many buyers are falling in love with houses before going in to talk with a lender or mortgage broker to get pre-qualified. They sadly end up falling in love with a house they won’t be able to afford.
If you have a high amount of debt and the balances on your lines of credit are high this will affect your credit score. Right now higher credit scores are being asked for, loans that would qualify for lower scores just six months ago are being turned down today.
A good way to see that credit score go up is to pay all credit down to below 50% of the limit. Also make sure to keep credit accounts open. Some people make the mistake of getting rid of the debt and dumping credit thinking it will look good, but it doesn’t. This will cause your credit score to drop.
The higher your credit score is the better your rate will be. Some lenders are offering special rates just for borrowers with scores over 700.
If you have done all you can to raise your score and it still isn’t enough things like a low debt to income ratio, a long employment history with your current job, and additional assets and income reserves will help you to get approval.
Respond to Loan Officer’s Requests ASAP for a Quicker Closing
Though there is an overwhelming number of loan applicants from both new and refinance mortgage loans right now, most of the slowdown in finalizing a mortgage is due to the response time of the borrowers. If there is a hold up in getting your loan officer the necessary documents to prove you should be approved this slows down how quickly your loan officer can present the application to the underwriter for approval.
Be Prepared for E-signings
Much of the approval of disclosures and the closing disclosure is most likely to be sent directly to your email account with a prompt to open up an application or separate program to sign electronically. If all borrowers on the loan can sign these items and return them as soon as they hit your inbox this will save a lot of time.
Provide the Most Up-to-Date Documents
During this time many lenders are requiring newer documentation for qualification. Bank statements used to be accepted up to 60 days old in the closing process now most lenders want them at within 30 days of closing. Verbal varication of employment would be accepted at 10 days old now many lenders want it at 3 days old. These items help lenders to feel more secure about loaning money with a lower chance of a loan entering forbearance.
Are you hoping to secure a mortgage in California right now? Please contact me anytime. I would love to help you get approved.