Buying a house is one of the biggest decisions a person will make during their lifetime. This is why it’s essential for buyers to show up to their meeting with a mortgage lender fully prepared. This is not a meeting you want to show up to without obtaining the right documents or doing the proper research.
So what should homebuyers do to prepare for a meeting with a mortgage lender? Here are some things to keep in mind.
Understand the current housing market
Before even thinking about meeting with a mortgage lender, it’s important to do some research regarding the local housing market; if you’re considering a home in Kansas, then you need to look at mortgage rates in Kansas.
This is important for a few reasons. First, buyers should understand the selling price of houses they’re interested in, how quickly houses are selling, and whether they’re going to be buying in a buyer’s market or a seller’s market.
Buyers need to know this so they can prepare themselves for shopping in the current market, whether it’s good or bad. Beyond that, the housing market can impact interest rates and loan amounts.
Get the right documents together
Buyers need to gather a few important documents to bring to their meeting with a mortgage lender. Tax forms for the past year or two are a must-have so lenders can validate employment history. Additionally, buyers should bring pay stubs for their current job and W-2s for the past two years.
Lenders will often pull a buyer’s credit report before or during the meeting, but buyers should also bring bank statements and any documents needed for special loan programs. It’s always best to speak with the lender ahead of time so you can know exactly what you need to bring to the meeting.
Have a good understanding of current finances
One of the biggest mistakes you can make is to meet with a mortgage lender without having a good understanding of your current finances. Potential borrowers should always know their credit score, amount of debt, and how much money they have in their bank accounts ahead of time.
It’s always best to be upfront and honest with lenders, and that’s not possible if you don’t even know where you stand financially. Knowing their current financial situations can also give buyers a better understanding of how much they might get approved for.
Improve your financial situation
If a buyer isn’t in the best financial situation right now, like having a lot of debt or a very low credit score, they may want to take some time to improve their finances before meeting with a lender.
While it doesn’t hurt to meet with a lender and receive advice on how to improve finances, it’s always best to be in a good financial standpoint before trying to get pre-approved for a mortgage. Paying off debt and using credit cards wisely can go a long way when it comes to improving financial situations.
Think of some questions to ask
Buyers are bound to have a lot of questions about the home-buying process, especially first-time homebuyers. This is why it’s always a good idea to prepare some questions ahead of time.
It can be easy to forget important questions during the meeting, so writing them down beforehand can ensure all questions are answered. Questions could be about things like current interest rates, how to obtain a higher approval amount, and how much of a down payment will need to be placed.
It can take some time and effort to prepare for a meeting with a mortgage lender. But putting in that effort will pay off and buyers can feel confident that they’re in the best position possible to get pre-approved for their desired amount.