Feeling a little lost as to what you should do when applying for a mortgage? The goal is to be able to prove that you’re financially stable enough to pay the loan you’ll be taking out on your home.

Lenders want to see that your credit is in good standing and that you’re financially stable. Here’s a few
things to do while you’re applying for a mortgage.

1. Continue to make your current housing payments on time. Whether you’re renting or
owning your current place of residence, make sure you’re paying your monthly rent on
time. Lender’s won’t look favorably upon you trying to purchase a new home if you’re
not even making payments on the home you’re in now.
2. Stay on top of all your bills. Good credit is going to be a key factor in obtaining a
favorable rate on your mortgage. By paying all of your bills on time, you’re ensuring that
your credit report will be nice and clean and you have no past-due bills.
3. This brings me to my next point, double check your credit report. You want to make
sure that all of the information on your credit report is accurate and up to date so
lenders will be basing their evaluation of your application on current information. This
is the perfect time to clarify any mistakes or inaccuracies that may be reflected in your
credit report, so make sure you’re available to take phone calls from your credit card
company if you need to.
4. Gather pay stubs, bank statements, and anything reflecting income. Your income will
have to be verified in order to qualify for a mortgage, and underwriters will call for 2
months of continuous pay stubs at bare minimum. So keep your pay stubs or reprint
them because you’ll definitely need to submit them.
5. Notify your lender if your method of income changes. If you change your job, get a
promotion, changes the way you get paid (for example if you move from hourly to salary
or from salary to 1099INT) you’ll need to notify your lender of that change so they’re
working with the most up to date information.

As you’ve probably noticed, the process of obtaining a mortgage is all about paperwork. The
misconception is that mortgages are becoming more and more difficult to qualify for. The reality is
that the documentation process has become more extensive. Lenders need more paperwork than ever
before and are making sure they’re double checking and cross referencing everything. This makes the
process for securing a mortgage more tedious and has homebuyers frustrated because they need to
have a paper copy of literally every aspect of their financial records. However, if you give them exactly
what they ask for without cutting any corners, the process will be less time consuming. Now, let’s look
at a number of things you don’t want to do when applying for a mortgage.

1. Establish a new line of credit. Don’t open any new credit cards or Co-sign for a loan or
line of credit. Both will add extra inquiries to your report and have a negative impact
upon your credit score. Regardless of whether or not your new line of credit carries a
balance, the additional line has been added to your overall credit score. Co-signing a
loan just adds to your overall debt.

2. Close or consolidate credit cards. If you close any current lines of credit, you’re just
putting a tighter limit on your capacity for credit. This can have a negative impact on
your credit score as well.

3. Increase the balances on your existing accounts. Increased balances on your accounts
can have a negative effect on your credit score because you are essentially increasing
your debt. Your lender can request a copy of your credit report at any time, so
increasing your balances in the middle of your loan application process can have
an impact on your application status because your debt has changed since you first
submitted your application.

4. Transfer or deposit large sums of money sans documentation. Like previously stated,
applying for a mortgage is all about paperwork. Lenders want to be able to know where
your money is coming from and how it is being deposited into your account. You’ll want
to keep deposit slips, transfer slips and copies of checks. This is where online banking
can come in handy. If you forget to make a copy of a check, most banks will scan any
check you deposit and upload it to your online banking account.

So there you have it. Those are just a few things you can do to help make your mortgage application
process simpler and less stress free. Hope it helps!