Loan Application Process
There are some things that you can do to keep the loan application process from being stressful.
First: find out what you want to know. Make a list of questions about the loan process. What are the various types of loans and what are the advantages and disadvantages of each as they pertain to your situation.
Second: consider points. What about points? Is it worthwhile to pay points to lower your interest rate?
Third: What about a lock-in, or should you float in hopes of a lower interest rate? If you think the rates may lower between your making application and prior to closing, then floating may work for you. In a time of rising interest rates locking in the rate means that the lender is committed to a lower rate than may be the prevailing rate at closing.
Fourth: Gather all the information you’ll need to fill out your loan application. Having everything available before you begin filling out the application will make things go much smoother.
Start early: The sooner you pull your credit report the more time you’ll have to dispute or resolve any credit issues that may appear on the report. Credit reports often contain errors so just because you have never missed a payment doesn’t mean that you are in the clear.
Shop around: Check several lenders and get good faith estimates. A good faith estimate will allow you to compare apples to apples in loans and terms via the APR or Annual Percentage Rate. The APR factors in closing costs and fees so that you know how a loan with points and a loan without compare.
Choose a Lender with a Local Presence: No one wants to have a real estate transaction screwed up by a lender who is non-responsive or difficult to reach. Having a local representative ensures that should push come to shove, you can walk into the lenders office and get things straightened out. Aside from that, without a local office you could be working with a lender working in his garage in his underwear. Not that home based lenders are bad, but if the lender isn’t able to have an established office who knows how the lender might handle your sensitive data such as income, social security number, and tax returns.