Mortgage Loans: The Mortgage Application Process

If you are in the process of refinancing your old mortgage or applying for a new mortgage, there are a number of mistakes you will want to avoid to get the job done right. Here are tips to help you avoid making costly mortgage mistakes.

Mortgage Application Step One: Do Your Homework

Doing your homework involves preparing a budget and taking a survey of your finances and your credit. How much mortgage can you afford? Use a mortgage calculator to calculate your monthly payment including taxes and insurance. Request copies of your credit reports from each of the three credit agencies and carefully scrutinize these reports for errors. If you find errors on your credit history you will need to dispute the errors with the credit agency and the creditor that placed it there.

Mortgage Application Step Two: Prequalify For Your Mortgage

Prequalifying is an important part of shopping for the best mortgage. You will need to compare all aspects of the loan offers you prequalify for, not just the interest rates. The Annual Percentage Rage is a good starting point for making the comparison; however, you need the "Good Faith Estimate" from each lender in order to make an informed decision.

Mortgage Application Step Three: Submit Your Applications

When you submit your mortgage applications it is important to provide accurate information regarding your income and assets. The lenders will run your credit before approving your loan; if there are discrepancies you could lose the interest rate you were qualified for, or even have your application denied.

Mortgage Application Step Four: Mortgage Pre-Approval

After the mortgage lender runs your credit report and grants you the pre-approval you can make your final decision as to which loan is right for you. Before you make this decision you should review all aspects of the mortgage and choose the best offer for your situation. Making a wrong turn here could cost you thousands of dollars, even potentially cost you your home. You can avoid making this mistake by registering for a free mortgage guidebook.

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