How The Mortgage Process Can Go Bad

 


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Buying a home should be one of the momentous events of your life. If you do not approach it in the right way, however, the mortgage process can foil your efforts.

At first, house hunting is something you will be enthusiastic about. After all, you are looking for that magical home, a part of the American Dream. As a few weekends of driving around pass, however, enthusiasm starts to turn into frustration. No home seems to fit your particular needs. Some properties are outright dumps! Who could possible buy these things?

Just when you are about to give up, something magical happens. You unenthusiastically go to see one more house late on a Sunday. You drive up and…it is love at first sight. You have finally found the home of your dreams. Even better, it fits within your budget. You go through the offer, counter offer process and agree on a price. You have made the dream come true at last! Or have you?

Your next step is to head off to the bank to find a mortgage to fund the purchase. You fill out all the relevant applications. You dig through your records and provide all the requested information. You then do it again because the lender inevitably loses something. Now it is time to sit back and wait for the approval.

Escrow goes quickly. You are one week from the closing when the lender calls. The loan officer regrets to inform you that the application has been rejected because of something to do with your finances or credit. Panic time! At this point, there is rarely anything you can do. The sale fails to close because you cannot get funding and you lose the earnest money deposit and the home. Sound like a reach? It happens every day.

There is a way to avoid this nightmare situation. The key is to go through the mortgage process before undertaking your house hunting expedition. Any mortgage lender will pre-approve you for a loan, so you will know where you stand before you get out on the road. Even better, the process is much less stressful because you do not have an escrow closing date hanging over your head.

Whenever possible, try to get pre-approved for a mortgage before making an offer on a home. The process will be much less dramatic.

Sergio Haros is with Great Western Mortgage - specializing in California bad credit mortgage loans.

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