How to Get a Loan for Your Dream Home in 24 Hours
With homes for sale in Bellevue, WA, being snatched up at a competitive rate, you may wonder how you can get a mortgage fast, even in one day. Follow these tips, and you might find yourself one of the lucky--and super prepared--property buyers who land a mortgage for their dream home in just 24 hours.
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Determine How Much You Can Afford
The first step in getting a mortgage quickly is deciding what you can afford. You can use an online mortgage calculator to obtain a close estimate of what you will have to pay each month for your desired loan amount.
The amount of your mortgage is the total amount you need to borrow minus your down payment, plus interest, which can vary from lender to lender. You may also need to factor in private mortgage insurance, property taxes, and closing costs as well.
Manage Your Credit Score
Although you can certainly get a mortgage within 24 hours once you follow the steps here, the real work that gets the ball rolling starts weeks before you even look at homes for sale. Since your mortgage approval will rely heavily on your credit rating, this is the first place to begin.
Mortgage lenders can use any or all of the three credit bureaus for information about your creditworthiness. The bureaus submit a report with a score (sometimes known as a FICO score) that reflects your overall ability to pay back a loan. The report contains information about past loans, timely payments, and debts, including credit cards, car loans, and financial judgments. The scores are typically different for each bureau, based on their own proprietary formulas.
Furthermore, the score you see on your report may not be the exact one a mortgage lender sees since lenders have their own scoring algorithm particular to home loans. However, the score you receive should be close enough to give you a good idea what prospective mortgage lenders are seeing.
Ways to improve your credit score within a month or two include:
• Reduce credit card use and pay down balances (but never close the card, since it’s your ratio of available credit to debt that’s important).
• Get added in name only as an authorized user of a credit card belonging to someone with excellent credit, such as a parent.
• Pay down other debt, such as car and student loans.
• Pay off old collections, making sure to get a letter in return that states your payment will be reported to the credit bureaus.
• Look for any mistakes that should be removed from your reports.
• Avoid opening new credit cards or initiating other credit inquiries.
Your credit report goes down slightly with every new inquiry, including applying for a mortgage. However, if you group all your mortgage applications into one short period, you should only see one hit covering all lenders collectively.
Compare Mortgage Rates
Once you’ve successfully done the steps above, it’s time to start shopping for loans. Not all lenders have the same terms, so it pays to compare, especially if you have excellent credit.
Your regular bank is a good place to begin, since you are already a known entity to them and vice versa, and it will make logistics easier. If you’re having trouble trying to track down a mortgage that works for you, try a mortgage broker, who has access to hundreds of lenders and loan plans.
Get Pre-Approved
Let’s say you find the home of your dreams… but it’s also the home of someone else’s dreams. You’re both racing to submit offers. The owner wants someone who is almost guaranteed to get a mortgage, so the offer doesn’t fall through.
To speed up the home buying process and to put sellers’ minds at ease, you can get pre-approved for a mortgage. The top real estate agents Bellevue WA home buyers rely on say that in a competitive market, most home sellers won’t even consider offers from buyers who are not pre-approved.
Since the lender in the pre-approval step has all your information, when you go to apply for a real mortgage with the same lender, the process goes very quickly. You could have a mortgage in 24 hours. Obviously, being pre-approved for a mortgage gives you a jump on other home buyers.
To get pre-approved, the lender pulls your credit report and reviews a tentative application that includes vital information like your income and current monthly debts. A pre-approval is given if the lender believes it’s likely you would be granted a loan soon after with a formal application.
Start With Pre-Qualification
Want to see how you would fare with the pre-approval process without lenders seeing your information? Try the pre-qualification process first, which lets you do a dry run of getting pre-approved. That way if there’s anything you need to fix, such as raising your credit score, you can do it before the lender sees your application.
You can get a mortgage in 24 hours if you follow this advice. Don’t wait until you find the ideal home. Start now, so you’re ready when you need to get a loan quickly. You’ll be confident of your ability to get a mortgage, and you’ll leave the competition in the dust!