By: Jim Gallagher
Before getting started with the home-buying process, you should familiarize yourself with the loan application requirements. Our Loan Application Checklist provides the requirements for loan applicants on a broad scale, as well as additional requirements for specific circumstances related to things such as employment, marital status, and purchasing methods (renting versus buying). While understanding and collecting these things are an important first step in the process, you should also think about ways in which you can improve your application before submitting it.
Review Your Credit Report
While most individuals are aware of their credit score, many fail to realize the amount of detailed information they can access from looking at their credit report. Every loan, credit card, and line of credit, including balances and repayment history is reviewed during the application process, so making sure that this information is correct is crucial. The Kelly Team at Envoy Mortgage uses CBC Innovis to pull credit reports and run “what If” simulators, helping our clients improve their credit scores as fast as possible.
Disclose Your Financial Information
In most cases, the more information your lender has about your finances, the better. Lower rates are often given to individuals who are able to show their financial responsibility through factors such as linking saving accounts, retirement accounts, investments, and credit cards. While sharing such information may seem risky, the Kelly Team at Envoy Mortgage keeps your information secure and private.
Strategically Time Your Application
If you are aware of an upcoming raise or bonus that increases your cash flow in the coming months, you might want to consider waiting to apply for a loan until after. A higher income on your application provides loan officers better insight about your financial stability and capability to make payments.
When to Apply if You’re Self-Employed
With most income referenced using pay stubs, it’s difficult for lenders to verify your financial information if you’re self-employed. If you are in this category, waiting until after you’ve done your taxes will allow you to be able to use your IRS tax return as a record of your earnings.
To avoid pitfalls that can cost you time, money, or even the home that you’re interested in, make sure you prepare properly when applying for a loan. Review our checklist and reference our tips above to improve your loan application! Should you have any questions about the loan application process, or if you’d like to apply for a home loan, please contact me at jgallagher@envoymortgage.com or 610.848.4024.