Getting a mortgage can be hard. You need to show the bank you can pay back a big loan to buy a house. Having good credit and money saved up are important. There are also lots of papers to fill out. This article talks about the 10 Best Tips to Get Mortgage Approval Fast. Doing them raises your chance to get the bank’s okay on a mortgage. Tips cover your credit score, debt, down payment, paperwork, the loan type and home, the lender, prep work, and more. Follow this advice and getting a home loan will be easier. The first tip is having good credit history.

Have a Good Credit Score and History

Good Credit Score and History - Anew Lending

Having a good credit score and history is one of the most important parts of getting your mortgage application approved. Before applying, check your credit score and report to see where you stand. Aim to have a score of at least 720, which is considered excellent credit.

Pay all your bills on time each month to build a strong payment history over time. Setting up automatic payments can help ensure you don’t miss due dates. If you have any late payments on your record, get current and continue making on-time payments.

Pay down balances on credit cards and other revolving debts as much as possible. This helps lower your debt-to-income ratio, which lenders look at closely. Try to get balances below 30% of the card limits. Pay more than the minimums due each month to pay debts faster.

Be strategic about only applying for the new credit you truly need in the months before applying for a mortgage. Too many new credit inquiries can lower your score temporarily. Wait to apply for new credit cards or financing until after your home loan closes.

Correct any errors on your credit report by disputing them with the reporting agencies. Having inaccuracies removed can give your score a boost. Getting errors fixed shows lenders you are monitoring your report.

Here are some key credit score tips to boost your approval odds:

GoalAction
720+ credit scoreCheck report and scores from all three bureaus
Low credit utilizationPay down card balances below 30% of limit
No late paymentsSet up automatic bill payments
Limited new inquiriesOnly apply for needed, approved credit
Accurate credit historyDispute any errors on your reports

Having excellent credit demonstrates financial responsibility and allows you to qualify for the best mortgage rates. By monitoring your score and report regularly, you can take steps to improve it over time leading up to your home purchase. Maintaining solid payment histories and low balances will help your application stand out.

How Long of a Credit History Do Lenders Want?

In addition to your credit scores, lenders look at the length of your credit history. In general, they like to see you’ve had credit for at least 3-5 years with positive payment activity. Applicants with short histories may find it harder to get approved or have to pay higher rates.

The longer you demonstrate responsible credit use over time, the more confidence lenders have in your ability to manage mortgage payments. If you have limited history, consider taking more time to build it or adding a borrower with better history to your application.

Manage Your Debt

Manage Your Debt - Anew Lending

When applying for a mortgage, it’s important to manage your existing debts wisely. Lenders want to see that you can handle your current debts responsibly before taking on a new long-term loan like a mortgage.

Pay down balances on any credit cards, auto loans, student loans, or other debts to lower your debt-to-income ratio before applying. Try to pay off cards with high balances first, then pay down remaining cards evenly. Shooting for 30% or less of your total available credit limit is a good goal. You can use balance transfer or consolidation loans potentially to simplify payments.

Stick to a monthly budget tracking your income and expenses closely. Limit unnecessary spending on dining out, entertainment, etc. to free up cash flow to pay down debts faster. Automate payments on loans to avoid missed payments being reported. Late payments negatively impact your credit history and credit score, which lenders review.

Get pre-qualified to see what mortgage amount and rates lenders can offer based on your financial profile. This shows how much home you can realistically afford based on your income, debts, and assets. It also shows if you need to pay down specific debts prior to formally applying. Being pre-qualified isn’t completely binding, but getting pre-approved is more official when ready.

If you have numerous high-interest debts like credit cards or payday loans, debt consolidation can be an option to reduce interest payments. This combines multiple debts into one payment through a consolidation loan or program. While this can make monthly payments and tracking easier, closing too many cards or accounts also lowers your total available credit which impacts your credit utilization ratio.

Here are key steps to manage debts before applying for mortgage approval:

  • Pay down credit card and loan balances
  • Stick to a spending budget
  • Get pre-qualified to see affordability
  • Consider lower interest consolidation if applicable
  • Continue making at least minimum payments

Properly managing debts to maintain a low debt-to-income ratio shows lenders you can handle adding a mortgage payment responsibly. Limiting new debts while paying down existing debts also keeps your credit score high leading up to mortgage application.

Tips for Managing Debt Before Mortgage Application

GoalActionBenefit
Reduce Credit UtilizationPay down card balancesLowers debt-to-income ratio
Avoid New LoansDon’t take on new auto/student loansPrevents credit inquiries hurting score
Track SpendingCreate monthly budgetFrees up cash to pay down debts
See AffordabilityGet pre-qualifiedDetermines max home loan amount
Simplify PaymentsConsider debt consolidation programMakes tracking easier if rates are lower

Being disciplined about debts and spending leads up to stronger mortgage approval odds. A lender wants to mitigate their lending risk, so the more responsible you are managing your finances, the more confidence they’ll have approving your loan application.

Save for a Down Payment

Save for a Down Payment - Anew Lending

Putting money aside for a down payment is one of the most important parts of getting your mortgage approved. While some loans allow down payments as low as 3%, aiming for at least 5-20% down is recommended. This shows lenders you are financially responsible.

How Much to Save

The minimum down payment depends on the loan type:

  • Conventional loans typically need at least 3-5% down
  • FHA loans allow down payments as low as 3.5%
  • VA and USDA loans can be 0% down for qualified buyers

But making a down payment of at least 20% has big advantages:

  • Avoids private mortgage insurance (PMI) premiums
  • Lowers your monthly payments
  • Improves chances of approval

Here’s a table with estimates on saving timeline based on down payment percentage:

Down Payment% of $300,000 HomeAmount Needed
3.5%$10,50014
5%$15,00015
10%$30,00030
20%$60,00060

As you can see, reaching a 20% down payment takes diligent saving for several years. Start as early as possible!

Tips for Saving for a Down Payment

  • Set up automatic bank transfers into a high-yield savings account
  • Make mortgage down payment savings a budget priority
  • Reduce dining out and other flexible spending
  • Consider down payment assistance programs if eligible
  • Use a first-time home buyer program like an IRA or 401k loan

The key is making your down payment savings a financial priority. Consistently setting aside money each month allows it to accumulate over time. Work diligently towards your down payment goal and avoid unnecessary new debts along the way. This financial discipline goes a long way with mortgage lenders!

Gather All Required Documentation

Gather All Required Documentation - Anew Lending

When applying for a mortgage, having all your financial documentation organized and ready to provide will make the approval process much smoother. Here are the key documents you’ll need:

Tax Returns and Income Statements
Provide your W2s, pay stubs, and federal tax returns for the past two years. These verify your income history. Also submit documentation for any additional income like bonuses, commissions, child support, etc.

Bank and Asset Statements
Lenders will want to see your current bank statements showing assets such as checking/savings account balances. Provide the most recent 2-3 months’ worth. These confirm you have funds for the down payment and closing costs.

Credit History Paperwork
If you have previous bankruptcies or foreclosures, submit any discharge or deficiency paperwork. This gives context on your credit situation. Also provide any proof of payments or resolutions for past-due accounts.

Military Service Records
For VA loans, submit your DD214 showing your discharge, along with a Certificate of Eligibility. These help qualify you for VA home loan terms.

Gift Letters
If you’re using gift money from relatives for your down payment, have the donor write a gift letter confirming the amount and that it doesn’t need to be repaid. This ensures it can be counted toward your funds.

Divorce and Child Support Documents
If you receive spousal support or child support, provide copies of the divorce decree or court order documenting the amounts owed. This income can help qualify you.

Tips for Gathering Mortgage Documentation

Here are some tips to streamline compiling all your mortgage paperwork:

  • Request tax transcripts early from the IRS
  • Save bank/asset statements electronically
  • Gather paperwork for joint applicants too
  • Scan documents as PDFs for easy sharing
Document TypeSpecific Items Needed
Income2 years’ tax returns, W2s, recent pay stubs
Assets2-3 months’ bank/asset statements
CreditBankruptcy paperwork, past-due account resolutions
MilitaryDD214, Certificate of Eligibility
OtherGift letters, child support documentation

Having all your financial documents ready ahead of time will help ensure a smooth mortgage application process.

Choose the Right Mortgage and Property

Choose the Right Mortgage and Property - Anew Lending

When applying for a mortgage, it’s important to choose the right loan program and property that fits your budget and financial situation.

Consider Federal Housing Administration (FHA) or Veterans Affairs (VA) Loans

FHA and VA home loans require lower down payments and credit scores than conventional loans. FHA loans only need a 3.5% down payment, while VA loans require 0% down for qualified veterans. These programs make homebuying more affordable if you don’t have 20% for a down payment saved yet.

Make Sure the Mortgage Term Fits Your Goals

Common mortgage terms are 15 and 30 years. The longer the term, the lower the monthly payment but higher total interest paid over the life of the loan. Think about how long you plan to stay in the home when weighing different mortgage term options.

Shop Mortgage Rates From Multiple Lenders

Rates and fees vary between lenders. Getting mortgage quotes from 3-5 lenders makes it easier to compare interest rates and choose the best overall deal. Online lenders often have lower rates than banks.

Get Pre-Approved Before Making Offers

Getting a pre-approval letter shows home sellers you’re a serious buyer who has been vetted by a lender. It also gives insight into the maximum home price and loan amount you qualify for, so you don’t waste time looking at homes outside your budget.

Pick a Home Well Within Your Approval Amount

Just because you qualify for a certain mortgage amount doesn’t mean you have to spend that much. Consider lower priced homes to allow room in your budget for property taxes, insurance, maintenance, and other ownership costs. Buying below your limit reduces financial stress.

Mortgage TypeDown PaymentCredit Score Needed
Conventional3-20%620+
FHA3.5%500+
VA0%620+

Following tips like considering special loan programs requiring smaller down payments, getting pre-approved, and shopping multiple lenders can help you choose the optimal mortgage and home for your situation. Selecting affordable options you qualify for and understand the terms of sets you up for success through the mortgage process.

Work With a Reputable Lender

Work With a Reputable Lender - Anew Lending

Getting a mortgage can be complicated. Working with the right lender makes a big difference. A good lender helps you through every step.

Find an Experienced Loan Officer

A loan officer guides you through the mortgage process. Find one who knows many loan programs. An officer with experience is best. Ask friends who they worked with.

Meet with a few officers before choosing one. Ask lots of questions at the meeting. See if they listen and explain things well. Make sure they have helped people like you before.

Choose a Responsive Lender

Pick a lender that gives fast answers. They should update you often by phone, email or text. Good communication prevents surprises.

Ask how quick they are to respond. See if past customers were happy. Check online reviews too. Reviews show real experiences.

Learn About Different Loan Types

There are many mortgage types out there. Your loan officer should explain the options. They include:

See which fits you best. Ask about rates, terms and costs too.

Provide Paperwork Quickly

Lenders need tax returns, pay stubs and more. Gather papers early to avoid delays. Give them quickly when asked.

Missing paperwork slows approval. The faster you provide it, the better. Ask what you need upfront.

Be Transparent About Your Finances

Tell the full money story early on. List debts, assets, expenses and income. Hiding issues causes problems later.

Approval depends on proving you can repay the loan. So be open about your situation. This helps the lender find the right program.

Following this lender advice raises approval chances. Find an officer suited to you. Supply paperwork fast. And lay finances out clearly. Then you can get the dream home you want!

Prepare for the Mortgage Process

Prepare for the Mortgage Process - Anew Lending

Getting a mortgage can take a lot of time and paperwork. Being ready for the process will help your loan get approved faster. Here are some tips to get you prepared:

Start gathering documents early. As soon as you decide to apply for a mortgage, begin putting key papers together. These include:

  • Tax returns and W-2s from the last 2 years
  • At least 2 months of bank statements
  • Pay stubs proving your income

Having these ready will speed things up.

Track your spending. Get in the habit of saving receipts and keeping a list of how much you spend. That way you can easily answer questions about where your money goes.

Do not open new credit cards. Opening new credit right before you apply makes you look risky. Wait until after you close on your home loan.

Pay down debts. Work on paying off credit card balances and other debts. This helps your debt-to-income ratio and shows you can manage money well.

Here is a table with more ways to prepare:

TipWhy It Helps
Inform your landlordLets them know your plan to buy a home
Save for closing costsClosing can cost 3-5% of purchase price
Pre-arrange moving helpMovers get booked up quickly

Order inspections early. As soon as your mortgage gets approved, call to schedule a home inspection. Do this before your final approval, since issues found during inspection could affect your loan.

Understand the closing process. Ask your lender to explain the timeline and what closing costs you can expect to pay. This avoids surprises about final mortgage amount and out-of-pocket fees.

Preparing your documents, finances, and expectations goes a long way toward making the mortgage journey smoother. Being organized helps the lender verify your financial information quickly, boosting your chances of final loan approval. So start getting your ducks in a row as soon as possible.

Achieve Your Homeownership Dreams

Getting approved for a mortgage may seem daunting, but taking the right steps can make the process straightforward. By maintaining good credit, saving for a sufficient down payment, providing complete documentation, working with a trusted lender like Anew Lending, and carefully managing your finances, you put yourself on the path to mortgage approval.

Our team of experienced mortgage professionals at Anew Lending is ready to help turn your goal of homeownership into reality. We offer an extensive range of mortgage products to fit your unique needs, along with step-by-step guidance tailored to your situation.

Don’t let the mortgage application process deter you from achieving your dreams. Contact Anew Lending today at (916) 226-9991 to speak with one of our mortgage experts. We’ll help you get pre-approved and find the right loan program for your goals and budget. Take the first step toward homeownership by giving us a call now!

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