Whether it’s your first or tenth time buying a home, having a clear path from your mortgage application to the closing depends on the lender you choose. The use of technology is changing the game and now makes the application and verification of certain information easier.
It begins with choosing a lender that gives you choices on when and how to conduct your business. Whether you prefer using digital resources for all or part of the process, talking in person with a professional, or a combination of both, the choice should be up to you. These are just a few of the factors that play into how quickly a lender approves your loan and how smoothly the process goes.
Even after you’ve completed the mortgage application, it’s important to remain involved in the process. Peter McCarthy, PNC’s Head of Mortgage, offers that the best approach to a painless mortgage process is a personal one.
“While we have stellar technology as part of our mortgage application and approval process, it’s equally important to foster a strong relationship with your lender. That gives you an advocate and resource, as well as the ability to ask questions and find the best approach for your situation. Having a strong rapport with your key contacts makes it easier to resolve any questions that may arise.”
That’s why PNC is committed to person-to-person support for mortgage applicants. “After all, if you’re spending your money and devoting your time, the ability to call and talk to someone is a truly valuable advantage to have,” McCarthy adds.
In fact, PNC’s combination of personal service and technology has garnered industry acclaim, earning the recognition of Bankrate© as Best Mortgage Lender Overall for 2023.
Once you’re ready to begin your mortgage application, what should you do (and just as importantly, not do) to make it as effortless as possible? Here are a few pointers to consider.
DO: Get approved for a mortgage early in your home search.
Many properties may have competitive offers from potential buyers. According to McCarthy, having pre-approval when others do not, makes you a more attractive buyer.
“The current housing inventory in the United states is very low. That means more buyers are considering fewer homes. If you find the right home, you need to be prepared to walk in and make an offer almost immediately. A pre-approval for your mortgage gives you buying power and the confidence of knowing what you can afford up front. Not to mention a leg up against someone else competing for the property.”
Another benefit? Pre-approval can also be a vital tool in the search process, telling you how much home you can afford. Equipped with this knowledge, you can take a lot of the guesswork out of your search.
Finally, pre-approval often speeds up the process between the acceptance of your offer and your closing date.
Mortgage Loans: Find the Right Home Mortgage Loan | PNC
DO: Some preparation.
Perform a quick review of your financial information at the beginning of the process. According to McCarthy, “When you do apply, simply be prepared to share information. Have a strong handle on how much you earn including any bonuses, what your income could be over time, and other income. Share your assets, including retirement income and monetary gifts. The more complete your information at the beginning, the better off you’ll be.”
First, take advantage of online application verification tools when available. You now may be able to verify your income, employment, and assets all online while you’re applying. In rare situations when those tools are not available, lenders will typically ask for the following documentation:
- Two months of most current asset statements for all banking and investment accounts, including any blank pages
- Two years of W2s
- Two years of federal tax returns with all schedules
- Recent pay stubs
- Most recent statements for retirement accounts (IRA, 401(k), etc.)
- Copy of driver’s license or other proof of identity
- Year-to-Date profit and loss (P&L) statement for self-employed borrowers
- Mortgage statement for all properties owned
- Homeowner’s insurance for all properties owned
The more responsive and thorough you are in providing this information, the quicker their decision can be.
First Time Home Buyers Guide: Tools, Calculators & Resources | PNC
DON’T: Take out new loans or accumulate additional debt while your mortgage application is under consideration.
Or, at the very least, not until you’ve confirmed with the lender that doing so won’t impact your approval decision. Part of qualifying for approval for your mortgage loan is to make sure your level of total payments is in line with your income.
“Biggest pitfall?” McCarthy continues, “Many consumers want to get a head start on the new home by buying furniture or appliances. As exciting as that might be, doing so can change an applicant’s credit picture dramatically.”
Taking out additional loans between submitting your application and the loan closing can distort your credit picture, requiring a lender to rethink your ability to pay the loan.
PNC Home Insight Planner - Planner - Home
DO: Communicate with your lender.
As mentioned earlier, mortgage approvals are a collaboration between you and the lender. Your lender might have questions regarding your credit or need to clarify something in your financial history. The sooner you respond with clear answers, the more quickly a decision will be forthcoming. Or, at the same time, you might have questions of your own. The earlier you ask any questions about the nature of your loan, the better.
DON’T: Have large deposits that you cannot readily explain.
Maybe it’s a family member giving you a sizable amount of money. Maybe you forgot to disclose a source of income on your application. Whatever the reason, it’s important that your financial records conform to what’s listed on your application.
According to McCarthy, “People often don’t share that they have a side business or income. You need to put everything out there. The more information you offer at the beginning, the less chance you’ll have questions as the approval process moves forward.”
DON’T: Sign documents without understanding them completely.
At any stage of the process—even during your closing – never feel pressured to move forward or to sign documents that you may not understand. Always feel comfortable asking for a full explanation of terms, conditions, and anything else related to your mortgage. Given that this will be one of the biggest transactions of your life, it’s crucial you have full understanding of your obligations as a borrower.
If you want the smoothest possible process when it comes to the decision on your mortgage, pay careful attention to these relatively simple Dos and Don’ts. The better prepared you are at the beginning and the more you view the process as a working relationship, the easier the mortgage approval process will be. And the sooner you’ll be able to move into the house of your dreams.
