Linda A. Cappello. Broker, GRI, ABR's Blog
If you’re a first-time buyer, odds are you’ve never seen or heard much about mortgage applications. However, for something as important as buying a home, it pays off to go into the process knowing what to expect.
Mortgage applications aren’t all that complicated in and of themselves. Most of the time, your chosen lender will walk you through the process and answer any questions that arise. However, complications do arise when it comes time to provide documentation on things like your income.
To make things easier for your first application, I’ve put together this list of frequently asked questions that first-time buyers often have about their mortgage application process.
Will applying for a mortgage hurt my credit score?
Mortgage lenders will run a credit inquiry to help determine your lending eligibility. There are two types of credit inquiries: hard and soft. A soft inquiry is a quick credit check that doesn’t affect your credit score. A hard inquiry, on the other hand, does. This means your score will be lowered slightly for a few months and then will bounce back.
Mortgage lenders run both types of inquiries. For quick, pre-qualifications, lenders typically run a soft inquiry. Then, as you progress through the approval process, they’re run a detailed credit report (hard inquiry).
What information should I have available?
Lenders will ask you for various documents. The most common things they will ask for include proof of income in the form of W-2 forms from the previous year and your most recent pay stub. They will also require a record of your other debts, including student loans, auto loans, credit card debt, and any other outstanding debt that you owe. Finally, they will ask for an inventory of your assets. This could include investments, properties, auto titles, and more.
What if I don’t work a conventional job?
People who are self-employed or have unconventional income can still qualify for a loan and will still be required to show proof of income. Lenders may ask for Form 1099 records, tax returns, or any other record or proof of income you have available.
How long does it take to complete an application?
Mortgage applications can be completed as quickly as you gather the required documentation. However, there’s more to getting approved for a mortgage than filling out an application. There will be time needed to process the application, and underwrite your mortgage. This entire process typically takes between 30 and 45 days.
Is it safe to apply for a mortgage online?
Most lenders allow you to start the application process online and their online portals are typically secure. Make sure you check your browser window to ensure that the connection to the site is secured, and you should have nothing to worry about.
Keep in mind that most online applications are designed to get you prequalified and on your way to getting a mortgage. So, if you want to avoid getting calls from the lender, you might not want to enter any data until you know you’re interested in borrowing at this time.
Selling a home may seem exceedingly difficult, particularly for a first-time property seller. However, if you receive an offer on your residence that falls just short of your initial expectations, you may be able to negotiate with a homebuyer.
How you handle a negotiation with a homebuyer may dictate how quickly you sell your residence.
If you're unwilling to understand a homebuyer's point of view, you risk missing out on an opportunity to get the best results from your home sale.
On the other hand, if you stay calm throughout a home selling negotiation, you may be better equipped to understand a homebuyer's perspective. This may help you find common ground with a homebuyer and ensure you can speed up the home selling cycle.
What does it take to remain calm during a home selling negotiation? Here are three tips to help home sellers maintain their composure throughout a negotiation.
1. Keep Your Emotions in Check
A home selling negotiation can be stressful. But home sellers who manage to keep their emotions in check can boost their chances of a quick home sale.
If you feel stressed during a home selling negotiation, don't hesitate to take a step back and look at the big picture.
Remember, your ultimate goal is to sell your residence. With the lines of communication open, you and a homebuyer can work together to ensure all parties involved in a negotiation are satisfied with the end results.
2. Look at All of the Options at Your Disposal
If a home selling negotiation goes south, there is no need to panic. Instead, consider all of the options at your disposal, and you'll be able to determine how to proceed from here.
For home sellers, it is essential to note that many homebuyers are on the lookout for high-quality residences in cities and towns around the country. Thus, if a negotiation with a homebuyer fails to work out, you can continue to promote your house on the real estate market.
3. Work with a Real Estate Agent
A real estate agent is a must-have for many home sellers, and for good reason. This housing market professional will handle a home selling negotiation and ensure you can seamlessly navigate the entire home selling journey.
Typically, a real estate agent can negotiate with a homebuyer on your behalf. He or she will keep you up to date about any homebuyer requests and offer honest, unbiased home selling suggestions. As a result, you can receive expert home selling guidance and make informed decisions at each stage of a home selling negotiation.
A real estate agent also will respond to your home selling concerns and questions at any time. That way, this housing market professional will make it simple for you to alleviate stress in a high-pressure home selling negotiation.
When it comes to handling a home selling negotiation, there is no need to worry. Take advantage of the aforementioned tips, and you should have no trouble remaining calm, cool and collected during a negotiation with a homebuyer.