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Updated July 10, 2019. Getting a mortgage isn't easy, but as someone who's been through the process, I will say it's less daunting than most people assume. In fact, if you're buying a home in an optimal scenario, it's possible to get fully approved for a mortgage in a month. Optimal scenario means your credit is good, your 20% down payment is ready and your existing debts are low. Here's how to get a mortgage in 30 days.
A credit score of 740 or higher will net you the best rates on a home loan. If your score is below that threshold, you might want to take steps to improve it before shopping for a mortgage. (Yes, that will put you past the month mark, but there are a few quickish ways to boost your credit.) In any event, you'll want to know your score so you're not hit with any surprises — like a big, fat denial — when you rate-shop.
Again, we're talking optimum home-buying scenario, so you're probably looking for a conventional home loan. Also known as "conforming loans," they're issued by traditional lenders in accordance with guidelines set by Fannie Mae and Freddie Mac, the two big government-sponsored entities that buy and guarantee mortgages on the secondary market.
You'll also want to think about loan length and interest rate structure. Most people opt for 30-year fixed rate mortgages, but you can often secure a lower rate with shorter-term loans. Learn more about the types of mortgages.
You can compare rates online or you call lenders directly to get pre-approval and see what rates they're offering. (Credit scoring models account for comparison shopping so you won't get dinged for multiple credit inquiries as long as you keep those credit pulls within 45 days of one another.)
Bonus tips: Ask your real estate agent to refer reputable mortgage lenders they've worked with to kick off your search.
You can shop mortgage rates in your area via our partner Consumer Advocates. Note: We may receive compensation when you click on the map below.
Mortgage rate quotes will influence your decision, but they're not the sole factor to consider before selecting a lender. Ask prospective mortgage lenders for a full list of fees they charge, how long they expect the approval process to take, whether you can buy points to lower the rate on your mortgage, and how available they make themselves to borrowers (i.e. do they communicate primarily over email? Can you expect a weekly call?).
Once you've settled on a lender, you can get preapproved and move to the formal underwriting process.
Your mortgage can't get approved until an appraisal — where an independent third party inspects and assesses the value of the home — takes place because the lender needs to make sure you (and they) aren't paying too much for the property. Lenders will only finance what the appraiser deems the house to be worth. If the appraisal comes in under your offer, you'll have to negotiate down the price, pay the difference out of pocket or walk away from the deal.
Your lender will tap the third party to appraise the house, but you'll need to pay their fee before they're dispatched and you can get this important step out of the way.
In addition to authorizing (and paying for) a credit pull, your mortgage lender will ask you to document your financial life. Expect to produce the following during the underwriting process:
Two years of tax returns
Two years of W-2s
Letter or other documentation proving your employment
At least two months worth of statements from all your major financial accounts, including checking, savings, retirement and investment accounts
Copies of cleared checks for large account deposits or withdrawals
Letters explaining blemishes on your credit report
Settlement documents related to blemishes on credit report
How fast you furnish these documents to your lender will greatly influence how fast your mortgage gets approved.
Mortgage lenders require proof of insurance before they will fully approve your loan. It's one of the last things they'll ask for and, if you're anything like me, the request will send you into an unnecessary frenzy. Save yourself some stress — and possibly some money — by shopping around for homeowners insurance before your lender asks for policy documentation. (Policygenius can help you compare and buy home insurance across carriers.)
Mortgages are fully approved by the time you're cleared to close on a home (otherwise you wouldn't receive clearance), but the loan isn't official until you sign all the documents. You'll do this at your attorney's office during the closing, which will take place sometime after the title search. Check out our home-buying guide for a deeper look at the entire process.
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Image: Harmen Jelle van Mourik
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