5 Simple Ways to Take the Stress Out of Getting a Mortgage

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Buying a home or an investment property is a big step towards financial freedom, but before you get there, you have to experience the stressful mortgage process. But try to stay positive. You can still have a zen property purchasing process if you take the steps to make it that way.

How to Take the Stress Out of The Mortgage Process

If the mortgage process keeps you up at night, you should try the following things. Once you do, you’ll get a better night's sleep, plus an incredible deal on your mortgage interest rates.

1. Choose a Company That Guarantees Closing on Time

Property owners will sign a purchase agreement that determines their closing date. However, this is where the real work begins for mortgage companies. They have to organize and gather documents, arrange and analyze the home appraisal, and evaluate the home inspection.

If the lender doesn’t take their job seriously, you risk missing your closing date and dissolving your contract with the buyer. When this happens, the buyer can cancel the transaction and keep your earnest money deposit. There’s also no guarantee the buyer will agree to an extension.

For these reasons, you should choose a company that guarantees closing on time. When you get a home mortgage loan from SoFi, your closing date is backed by a $2,000 guarantee. 

2. Find Ways to Combat Inflation (In the Long and Short Term)

There’s a one-to-one correlation between inflation and mortgage rates. Some inflation is a sign of a healthy economy, but the pandemic has caused costs to rise quickly and significantly. If you took out a variable-rate mortgage during the pandemic, you may not be able to afford it now.

With that said, variable-rate mortgages usually offer better rates over time than fixed-rate mortgages, even though variable mortgages have the potential of incurring higher interest rates.

Homeowners should invest in a variable rate mortgage to combat inflation in the long term, while commercial real estate professionals should invest in technology. Technology is combating inflation in the commercial sector by increasing worker output and improving project decisions.

3. Understand Major Parts of the Mortgage Process

New homeowners are often unfamiliar with the mortgage process, and feeling uninformed can cause significant stress. While the process seems complicated, you can simplify it by planning early. You should research the process and plan your budget to know what you can afford.

Before getting a mortgage, you should be familiar with these topics:

● Final Self-Assessment and Preparation: An outline of your budget, savings, credit, and debts that you’ll place on the loan application

● Loan Application: Where you’ll submit the loan application and get pre-qualified

● Mortgage Origination: A loan file is created by combining provided documents 

● Underwriting Process: The application is reviewed by an underwriter

● Satisfying Conditions: If the loan isn’t approved, the underwriter will give you a list of what to do to get approved, such as lowering debt or offering proof of insurance

● Closing Process: When all monies are distributed to everyone involved

An educated consumer is a low-stress consumer. When you know what you’re in for, you can prepare for anything that comes your way. Plus, it’ll give you the confidence to start the process.

4. Know All of Your Options (and Get to Know Your Lender)

Whether you’re shopping for a condo with a stylish balcony, a small office, or a large mansion, you can find a mortgage lender that suits your needs. You have plenty of options, so give yourself time to compare and contrast choices, or you could unintentionally stress yourself out.

Try to build a relationship with your lender. This will help you feel more confident, comfortable, and supported during the mortgage process. The optimal lender will have your best interests at heart and won’t use high-pressure sales tactics. If a lender makes you uncomfortable, run.

5. Familiarize Yourself With the Required Mortgage Documents

To begin the mortgage process, you need to submit a mortgage/loan application. If you do this early, you could get a conditional approval, which better anticipates what you’ll receive from the lender. You’ll also require a credit report, pay stubs, and W-2 forms for the last two years.

If you switch jobs a lot or you’re a freelancer, the lender may require additional documents, such as information about long-term debts, bank statements, proof of income, or tax returns.

After submission, you’ll come across the following documents:

● Pre-Approval Letter: Indicating that your loan is approved

● Loan Estimate: Outlines the full estimated details of loan terms and costs

● Commitment Letter: Outlines loan amount, repayment terms, interest rate, and APR

● Appraisal Disclosure: States you have the right to receive a completed appraisal report

● Closing Disclosure: Details the amount you’ll pay with the closing of your loan

● Mortgage Note: Sign at closing and states your commitment to repay

● The Deed: Outlines the transfer of the property ownership to you

Learning how to prepare these documents will alleviate your stress throughout the process.

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