How To Avoid Stress During The Mortgage Process

In this guide, we will cover how to avoid stress during the mortgage process. The mortgage process does not need to be stressful. As long as everyone is on the same page such as open communication between the loan officer, processor, and the borrower. The first reason there is stress during the mortgage process is that the documents required were submitted with paperwork missing. The stress during the mortgage process is that the documents required were submitted with paperwork missing or parts of docs were not legible. It is better to take a few steps backward to go forward. Ensure all documents required are legible with no missing pages. In the following paragraphs, we will cover why borrowers stress during the mortgage process and ways on avoiding it. We will discuss the most common reasons for stress during the mortgage process. We will also cover reasons for a last minute mortgage loan denials.

Submitting Incomplete Documents To Underwriting

People buying a home for the first time feel overwhelmed by the number of mortgage documents required for the home loan process when applying for a mortgage. It seems like there’s an endless demand for documentation needed and documents required for the mortgage process. The mortgage process is an actual process. It takes the lender and the borrowers to work as a team for the mortgage process to go smoothly. The mortgage loan process cannot be rushed. One of the most common reasons for stress during the mortgage process is due to the loan officer issuing a hasty pre-approval without carefully combing over each required document to process the mortgage loan. In the following paragraphs, we will cover the documents required to start processing the mortgage loan application through the mortgage approval and closing process without any stress and delays.  Speak With Our Loan Officer for Mortgage Loans

The Start of The Mortgage Process

Once you get a pre-approval letter issued from your loan officer, you can start shopping for a house. Once the real estate purchase contract has been signed by the seller and buyers,  the mortgage loan process officially starts. A mortgage processor gets assigned to the borrower’s home purchase loan. The processor will request updated documents so they can prepare the file for a mortgage underwriter. Keep in mind the start of the mortgage process is updating all documents required. Dustin Dumestre of F-1 Lenders and an associate contributing editor of GCA FORUMS says the following about the role of a mortgage processor.

The mortgage processor’s role is to make sure every document is legible with no missing pages. The initial start of the mortgage process is for the mortgage processor to gather all the documents required for the mortgage underwriter.

The mortgage underwriter will kick the file back if she finds any documents not legible or pages missing. Once a files gets suspended by the mortgage underwriter due to missing pages or docs, the file gets kicked back to the mortgage processor and gets placed in the end of the pipeline, which is starting from scratch. A great mortgage processor will be knit picky  the file to make sure the documents required for the underwriter are complete, legible, and updated to avoid the underwriting rejecting the file for updated conditions.

Credit Disputes Halts Mortgage Process

One of the biggest reasons for a last-minute mortgage loan denial is due to the loan officer and mortgage processor overlooking credit disputes prior to submitting the mortgage loan to underwriting. Overlooking credit disputes on non-exempt credit tradelines is the most competent thing any loan officer or mortgage processor can do.

You cannot have credit disputes during the mortgage process on non-medical collections, charge-off accounts, late payments, and any derogatory credit tradelines that is newer than 24 months old.

Medical collections are exempt. Non-medical collections with zero credit balance is also exempt. Furthermore, non-medical collection accounts that total less than $1,000 in outstanding collection balance are exempt from retraction. Older derogatory credit tradelines that are older than 24 months old are exempt from credit disputes being removed. Each lender has lender overlays on credit disputes. Lenders may require exempt credit disputes to be removed. All credit disputes that are not exempt need to be removed for the loan process to proceed.

How Removing Credit Disputes Cause Stress During The Mortgage Process

Removing credit disputes will drop credit scores when borrowers can no longer qualify. When a consumer disputes a derogatory credit tradeline, the credit bureaus will automatically discount the negative credit tradelines from the credit scoring model. The verbiage consumer disputes this credit tradeline: Tradeline under investigation triggers an increase in credit scores because the credit bureau algorithm discounts the disputed credit tradelines like it does not exist. Therefore, there will be an increase in credit score. When you remove the credit disputes, the derogatory credit tradeline will report like a freshly new derogatory credit tradeline so it will drop the borrower’s credit scores even more than before. There are many instances where the borrower no longer will qualify for a mortgage.  The team at GCA FORUMS Mortgage Group are experts in helping borrowers who got a last-minute mortgage loan denial due to loan officer mistakes. We have creative ways of getting you qualified and getting you pre-approved when other lenders cannot.  Click Here To Start Your Mortgage Loan Process

Best Mortgage Lender For a Stress-Free Mortgage Loan Process

Not all lenders have the same lending requirements on FHA, VA, USDA, and conventional loans. Not all lenders offer alternative mortgage options such as non-QM loans, bank statement mortgages, no-doc loans, fix and flip mortgage options, and other loan programs. Per HUD agency guidelines, the minimum credit score requirement to qualify for an FHA loan is 500 FICO with a 10% down payment. To qualify for an FHA loan with a 3.5% down payment, you need at least a 580 credit score. However, most lenders will require a 620 to 640 credit score.

What Are Lender Overlays?

Why is it that one lender will approve an FHA loan with a 580 and a different lender will require a 620 FICO? Mortgage lenders can have higher lending standards that are higher than HUD’s minimum guidelines. These higher lending standards are called lender overlays. Not all lenders have the same mortgage rates on government and conventional loans. Some lenders will have substantially higher rates than others. This is why it is very important to shop and compare rates and terms when shopping for a mortgage.

Mortgage Loan Options

Here are the loan programs offered at GCA FORUMS Mortgage Group:

• FHA loans
• VA loans
• USDA loans
• Conventional loans
• Jumbo mortgages
• NON-QM loans
• Non-QM jumbo mortgages with credit scores down to 500 FICO
• FHA 203k loans
• Reverse mortgages
• 90% LTV Non-QM Jumbo Loans
• Asset Depletion Mortgages
• No-doc home loans
• Fix and Flip Mortgages
• Doctors mortgage loans
• All-in-one mortgage
• DSCR Mortgages with no income documentation required

GCA FORUMS Mortgage Group has a national five-star reputation for being able to do loans other lenders cannot due to its no overlays. Borrowers have many options when choosing a mortgage loan program that may best suit their needs. However, the common denominator for any loan process to run smoothly is to make sure the mortgage documents required are legible, complete, and turned in timely. Not having neat, legible, complete mortgage documents with missing pages is one of the main reasons for a loan denial, delays in the loan process, and stress.

FAQs on How To Avoid Stress During the Mortgage Process

Many homebuyers need help to avoid stress during the mortgage process. Below are some frequently asked questions (FAQs) from homebuyers.

What Can I Do To Make The Homebuying Process Easier and Avoid Stress During the Mortgage Process?

Answer:

1. Make sure the borrower is thoroughly qualified before the pre-approval letter is issued.
2. First, ensure you have all the required documents, such as tax documents, bank statements, pay stubs, and a list of debts and assets.
3. Making this step will help ease the application process.
4. Also, kindly commit the mortgage so that you know the loan amounts and terms beforehand.

What Elements Cause Stress During The Mortgage Process?

Answer:

1. A few important factors increase stress during the mortgage process, resulting in last-minute denials.
2. This happens due to fluctuations in the above clients’ financials.
3. For example, they may quit their active jobs, decrease production incomes, or take on more debt.

How Can I Avoid Undoing Any Unwanted Financial Changes During The Mortgage Process?

Answer:

1. It is not inevitable for one to make any unnecessary major obligations that are avoidable when the mortgage is being processed.
2. For instance, do not try to apply for new credit cards or any other new loans.
3. Do not make any unnecessary big expenses.
4. Keep your current workplace the same.
5. When a mortgage has been taken, and all other relevant financial factors have been kept constant, one has to appreciate the level of importance of this factor.

Check Changes In Your Credit Rating To Reduce Stress While Applying For The Mortgage.

1. Any financial aid the client needs must be applied in a credit form.
2. This will concern your credit history, the specific interest rates being offered, and the particular provisions of the loan.
3. However, most lenders will verify your score when you apply and again after the close of your house loan.
4. A last-minute fall in the credit scores before the loan closure may lead to the rejection of the application, increased percentage ratings, or lower amounts.

What Steps Can I Take to Avoid Stress During The Mortgage Process?

Answer:

1. Approach the lender with adequate information in advance, whenever possible or as necessary, with approaches already prepared.
2. Your loan officer should get an automated underwriting system approval.
3. Ensure you thoroughly review all of your income, asset, liabilities, and documents required for any omissions and regularly communicate with the lender.
4. Usually, non-traditional documentation becomes a habit as they stop through steady support and communication.
5. This is because there is no more reason to sit in needless and time-stealing procedures.

Can I Overcome the Concerns Associated With Debt-to-Income Ratio (DTI)?

Answer:

1. Make the DTIs calculations before applying for the loan.
2. Assess debt-to-income ratios to see if they are within acceptable limits to the lender.
3. In most cases, 50% DTI is a minimum on conventional loans.
4. FHA loans 46.9% front-end DTI and 56.9% back-end DTI.
5. USDA loans 29% front-end and 41% back-end.
6. DTI 50% on non-QM loans.
7. But each lender will have lender overlays).

Suppose One Has Marginally High DTI.

Answer:

1. In that case, it is important to refrain from acquiring additional assets such as car loans, car installments, and credit card debts when applying for a mortgage.
2. See what you can pay off to have more of a cushion instead of barely meeting the maximum debt-to-income ratio cap.

What Should I Do If I Have a Large Amount Of Money That I Wish Not To Jeopardize About My Mortgage?

Answer:

1. Lenders must be provided with an explanation for a large or additional infusion of funds, as harboring such large sums can be unpleasant.
2. If someone is giving you a monetary gift, make sure the person gives the gift a signed statement that the money is not a loan and does not have to be repaid.
3. If large amounts of cash are being held that lenders cannot explain, provide any evidence substantiating the source of the cash deposit, such as the sale of one’s house or other assets or standard bonuses.

What Should I Do if My Work Situation Drastically Changes While Attempting to Get A Mortgage?

Answer:

1. In case of any employment disturbance like extended short work hours or a job change.
2. Kindly contact your lender as soon as possible.
3. Any income change is expected to impact the ability to repay a mortgage loan.
4. Therefore, the lender must change conditions or reconsider its loan amputation earlier rather than later since such surprises are undesired.

Knowing We Are at the End of the Process, How Can I Avoid Stress During the Mortgage Process?

Answer:

1. Stay cool and keep your composure.
2. Ensure the closing disclosure preparation is verified and all the clauses present follow what was previously established.
3. This is to tamper with the lenders so they can avoid unpleasant surprises at the last minute.
4. Avoid modifications to the credit rating and the financial state.
5. Perform any required conditions to facilitate closure in time.

Should I Worry About the Home Appraisal?

Answer:

1. Do not shy away from the possibility of taking on additional responsibilities in the form of a loan to buy the home as long as the judgment of the home’s value is realistic.
2. If the appraisal stresses you out, get informed about the property values.
3. Assist your real estate professional to ensure your property’s value is reasonable.
4. If the appraisal is lower than expected, you must adjust your preferences.
5. Re-negotiate the purchase price with the seller.
6. Choose cheaper properties.
7. Or be ready to increase your down payment.
8. Few people bother about how to shield themselves from the stress of worrying that they have been turned down at the last moment for a mortgage application.

Yes, that specific situation is reachable, so why not say other standard responses and the appropriate steps are taken?

 Speak With Our Loan Officer for Mortgage Loans