Taking out a mortgage for a home is an exciting period for many people, especially for first-time homebuyers. However, because so much is at risk for both the lender and the borrower, finalizing mortgage loans is a lengthy process. If you follow these tips, though, you can streamline your application, increase your chances of loan approval, and perhaps even secure an optimal interest rate.

Do:

Review your credit report. 

Generally speaking, you’ll need a fair credit score to qualify for a conventional mortgage loan and a relatively clean report with a low debt-to-income ratio. This is because the lender needs to see how you handle paying off debts and maintaining your credit balance. Review your credit report from all three bureaus (Equifax®, Experian®, and TransUnion®) before applying to ensure you meet the minimum requirements and to confirm there are no inaccuracies. If you do spot any issues, notify the appropriate bureau about addressing them. 

Maintain steady employment. 

Lenders want to see at least two to three years of steady income, so now is not the time to make any major career changes. Do not quit your job at any point during the application process, even if you had been planning to for a while in order to go back to school or start a business. A spotty work history or a seemingly impulsive career choice can make it seem like you aren’t able to hold a job, or are prone to risky financial decisions. Remember, the lender can back out at any point up until closing, especially if your financial situation changes dramatically from when they initially approved you. 

Don’t:

Finance household furnishings. 

While you might be excited to furnish your new home, financing major purchases like furniture will hurt your chances of approval. In fact, it’s advisable to avoid using credit altogether until after closing since this can negatively impact it. Taking on more debt while your application is pending is a surefire way to jeopardize your chances of securing the loan. 

Pay for unnecessary fees. 

There are many fees that you may have to challenge throughout the proceedings. For example, all document prep should be rolled into the origination fee, so if you’re charged a separate line item for it, ask your lender to waive it. Likewise, you shouldn’t have to pay for a title search since the service should be included in the title insurance premium. Don’t be afraid to ask for a detailed explanation of every other fee you’re charged before paying it, as well. 

When you’re ready to apply for a mortgage loan in Tennessee, turn to Putnam 1st Mercantile Bank. A locally owned and operated institution, this lender is proud to help families across Cookeville purchase real estate. A full-service bank, they also offer business loans, credit card accounts, merchant services, lockbox rentals, and checking and savings accounts. To find the branch nearest you, visit their website or call (931) 528-6372.