Today’s stricter lending environment means that processing a mortgage application is more complex than ever, given the number of steps that lenders, underwriters, and mortgage insurers must all complete before
home buyers truly have their financing
in place.


To help ensure the process goes
smoother, you can also take steps of
your own. It’s a good idea to discuss
the process with your Accredited
Buyer’s Representative (ABR®),
even before shopping for homes. By
planning ahead, you’ll be in a much
better position to negotiate and move
forward on a purchase—and avoid
any unpleasant surprises regarding
your mortgage.


Lenders and mortgage insurers look
at a variety of factors, but the two
most important are your monthly
mortgage payment and your total debt
load, relative to your gross income.
As a home buyer, it’s also important
to consider additional expenses,
beyond your mortgage payment, that
can impact how much home you can
afford. Depending on your situation,
these other expenses could include
property taxes, mortgage insurance,
homeowners insurance, home
maintenance expenses, homeowner
association fees, parking expenses,
and utilities.


Deciding what type of mortgage
is best for you depends on your
personal situation, your fi nancial
scenario, and your future plans.
For example, if your down payment
isn’t large enough to qualify for
a conventional loan, an FHA
mortgage can be an excellent option.
Alternately, you may qualify for an
attractive program offered at the
national or local level. Mortgage
programs are always changing, so ask
your ABR® about current options.


Your ABR® can provide several
recommendations, based on past
home buyers’ experiences. Rates
and fees are typically very competitive
between lenders, so it’s often more
important to focus on other factors,
including the level of service provided
and how well they’ve executed
transactions for other buyers. The
type of mortgage you are seeking
may also impact your choice of
lender, since some are more familiar
with certain mortgage programs
than others.


Completing a loan application with
one or more lenders will help confi rm
whether your intended mortgage
financing plans will work out as
hoped, or if you must modify your
plans. It’s important to understand
since preapprovals are contingent
upon the lender receiving full
documentation, your preapproval
does not guarantee that you have a
mortgage. Still, it’s an important fi rst
step that will also put you in a better
negotiating position with sellers.


As soon as you are under contract to
purchase a home, commit to working
with one lender to complete your
mortgage application. You will probably
be charged a fee at this point because
this is when the lender starts incurring
processing expenses on your behalf.