1. Avoiding or Leaving Out Information on Your Financial Profile
Your Mortgage Approval will begin by reviewing your personal information. This information will include employment, income, residence history, debts, and assets. The important takeaway is to answer every question and be truthful. If every question about your financial profile isn’t answered, it has the potential to derail the loan process. It is better to know everything up-front so we can handle it before it becomes an issue.
2. Documentation, make sure you have everything
Your lender will next ask you for detailed documentation which may include:
- 30 days of pay stubs
- Two years of tax returns and W-2s
- Year-to-date business financial statements if you’re self-employed
- Two months of statements for all asset accounts
- Explanations and paper trails of all deposits (and often withdrawals)
- A home insurance quote with adequate coverage
- Full financials on any other homes or businesses you own
If any document is missing, providing it will be necessary to move forward. Colorado mortgage group will also run your credit, which can reveal employers, addresses, debts, and other credit inquiries. If new information comes to light, you’ll be required to explain and document all of it.
3. Pre-approval is not a loan approval
You should consider your loan approved by an underwriter before you write any offer to buy a home. Let’s talk about the difference between being “pre-approved” and obtaining loan approval. Getting a mortgage “pre-approved” means you’ve talked to a lender, and provided the necessary documents listed above, and your profile looks good. This does not however mean you have loan approval. The next step would be to get “underwriting approved”. This would mean obtaining a formal loan commitment in writing. When this step has been accomplished your loan approval is official. Your Colorado Mortgage Loan officer will be the one to submit your file to an underwriter.
4. Not knowing what is realistic or being uninformed about rates
Avoid surprises when it comes to rates and get your lender to quote a rate based on your closing timeline. Remember rates change daily. Rates are based on how long they’re locked, for example, a shorter lock at 15 or 30 days will have a lower rate than a longer lock such as 60 days. As the borrower, you are under rate market movement until you’ve entered into the contract. You are in contract when a seller accepts your offer. It is key to know that before entering a contract you cannot lock a rate, this is because a rate is linked with the borrower and the property. Colorado Mortgage Group Publishes our rates online. These are the same rates you will receive when you call us for a quote.