What You Need to Know When Securing a Mortgage, According to a Professional

If you’ve landed on this blog post, in all likelihood, you’re looking to buy a home. For those of us that look to industry experts to guide us through mortgage approvals, the various types of loans that we qualify for and the best interest rates, this article may be more helpful than you think. Here’s everything that you need to know when securing a mortgage, according to Alex Browning — one of Empire’s Preferred Lenders and Senior Loan Officer at American Security Mortgage.

Pre-Approval Letters

All buyers should get a strong pre-approval letter. Make sure that your lender is pulling credit, and obtaining and reviewing the necessary income documents and asset statements to secure funds for your down payment and future mortgage. “I always try to be as thorough as I can on a pre-approval, especially since buyers are putting down a non-refundable deposit in most cases,” says Alex.

Applying For & Obtaining New Credit

If you’re purchasing a new-build home, be mindful of obtaining or applying for new credit during the construction process. Do not obtain any new larger purchases like cars without speaking to your preferred lender first. Credit reports are valid for 120 days, meaning that in most cases, a lender on a new construction home will pull two credit reports — one at the pre-approval stage and one closer to closing.

Down Payment Options

Your down payment options depend on the type of loan that you’re given. For example, conforming loans offer buyers a down payment of 5% of their purchase price, while a Federal Housing Administration (FHA) loan offers as little as 3.5% down. Additionally, Veterans Affairs (VA) loans can offer 100% financing, while jump loans offer buyers 20% down. It’s important to speak to a reputable lender to discuss the options available to you, depending on your current scenario.

Be Prepared to Move Quickly

If you’ve found a property that you like, it’s important that you move quickly. Especially in the Charlotte market, but in other regions across the county as well, it’s a sellers-market — so don’t be surprised to find low inventory or a home that you like sold swiftly. That being said, it’s important to take your time with the decision to buy and make sure that your future home is the right fit for you.

Interest Rates

Some industry experts believe that interest rates will be increasing from their current levels soon, causing some concern for buyers who may be 6+ months away from closing. “At American Security Mortgage, we have the ability to lock a rate for up to 270 days on conforming loan amounts,” says Alex. Make sure that you ask your lender if extended lock options are available to you, and what fees and options are associated with them.

To further assist you with your home buying journey, visit our homebuyers resources page and browse through our collection of homeownership articles.