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Equity Now In The News - 2019

The Simple Dollar

Tips for Getting a Mortgage


by Mia Taylor Updated on 05.23.19




Housing Loans

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Obtaining a mortgage can be one of the most stressful and exhausting parts of the homebuying process.

Since the subprime housing crisis and the market crash that kicked off in 2007, mortgage applications and reviews have been more detailed and rigorous than ever, requiring seemingly endless paperwork and extensive income verification.

There are also many variables to consider when shopping for a mortgage that can impact the success of the entire process and ultimately how much you spend — not only to obtain the mortgage, but on your home over the long run.

To help first-time homebuyers navigate all of these hurdles successfully, we asked mortgage industry experts to share their top tips for obtaining a mortgage.

1. Gather your documentation.

Key items to pull together include recent pay stubs, tax returns, W-2s from your employer, and bank statements from all savings and checking accounts, as well as from any investment or retirement accounts.


Self-employed applicants will need to provide two years of tax returns and their most recent profit and loss statement showing revenues, costs, and expenses during a fiscal year.

2. Get your financial house in order.

In addition to merely gathering paperwork, it’s a good idea at this stage to get yourself in top financial shape so that lenders view your application more favorably, adds Hammond.

Improving your financial profile involves a variety of elements. For starters, avoid carrying excessive debt.

3. Shop around. And then shop some more.

Reviewing multiple lenders, or mortgage shopping, is a critical step — and it’s one that many first-time home buyers often neglect, instead taking the first lender recommendation they receive or mortgage quote obtained.


“You never want to settle on the first lender you talk with,” said Andy Harris, president of CRMS, Vantage Mortgage Group and Association of Independent Mortgage Experts. “Buyers don’t realize how different the terms are that vary from company to company – even if the loan type is a commodity, pricing is not.”


When talking with different lenders and mortgage brokers, it’s important to get quotes on the same day for an accurate comparison, Harris added.

While daily market rate changes will impact all lenders uniformly, the actual rates they offer borrowers will vary based on other factors as well.

“This is relating to their own overhead costs or other items that impact their overall pricing that they offer,” Harris continued. “So, for example, if you’re comparing two companies on the same conventional 30-year fixed loan on the same day, one might quote a fee of $2,000 at a specific rate. While at that same rate, another is offering a credit of $2,000. That would be a $4,000 direct difference in cost for the same conventional 30-year fixed loan.”

When shopping around, be sure to include a local, truly independent mortgage broker in your search, someone who’s experienced and accountable, added Harris, as such an individual can shop wholesale lenders on your behalf and work directly for you.

Matt Hackett, an operations manager of Equity Now, a direct mortgage lender, suggests applying with a minimum of three lenders, which will give buyers a true sense of the market.


“Compare them to see where you can get the best deal,” said Hackett.

4. Get preapproved, and do it early.

First-time home buyers often get caught up in the more appealing parts of the process — shopping for their dream home — and neglect to get preapproved for a home loan. But doing so early on can prevent disappointment later.



Getting preapproved, on the other hand, takes the review a step further, typically requiring the home buyer to submit pay stubs, W-2s, and bank statements. A letter of preapproval from a lender also shows sellers that you’re a serious buyer with financing in place.

5. Rate locks: What are they, and should you get one?

A mortgage rate lock is an agreement between a borrower and a lender that allows the borrower to lock in an interest rate for a mortgage over a specified period of time. In other words, the rate will stay consistent, even if the market changes. Lock periods range from 15 days to 45 or even 60 days, and lenders may charge a lock fee.

There is a downside to locks to keep in mind. If the market changes and rates decrease after you’ve locked in, you generally won’t be able to take advantage of the lower rates.

6. Know your mortgage, and your loan officer.

A home is one of the biggest purchases most people will ever make, so it’s important understand what you’re getting into.

Having a basic grasp of mortgages and all of their variables will save you money and heartache, said Jennifer Beeston, of Guaranteed Rate Mortgage.

“Read and watch videos online about the mortgage process and options. Know the difference between a fixed rate and an adjustable-rate mortgage, and what points are. All this info is online and it is free,” she said.


And one last step – research your individual loan officer.

“The actual person doing your loan is critical. Just because a company has a good name or does a lot of loans does not mean the person doing your loan is good,” said Beeston. “Look for third-party reviews of the person who is your loan officer.”

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Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune. 

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