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Common Mortgage Mistakes & How to Avoid Them

If you are applying for a mortgage in Tennessee for the first time, you might feel overwhelmed. You are not alone! There are so many different types of mortgages, various lenders, and lending rates that it can be tricky to navigate on your own! That’s where Flat Branch Home Loans, The Erica Kelley Group comes in! We are committed to helping you find the best mortgage in Tennessee that fits you and your family's needs. A mortgage isn’t just a loan or a financial transaction. It is your first step to building your family’s future. With that in mind, let’s look at common mortgage mistakes and what you can avoid when applying for a mortgage in Tennessee.

Not Understanding the Mortgage Process

One of the biggest mistakes home buyers make when trying to apply for a mortgage in Tennessee is that they don’t fully understand the various steps that make up the mortgage process as a whole. Unless you are an expert, that is what mortgage brokers like Flat Branch Home Loans, The Erica Kelley Group are for! However, it is wise to have at least a basic knowledge of the process and in which order the various steps should be handled. The basic steps include:

1. Pre-Approval - You should always seek pre-approval for a mortgage in Tennessee before you go house hunting. This gives you a solid idea of how much your budget can be and tells sellers you are a serious buyer!
2. Loan Option Review & Selection - Once approved, your loan originator should present various options for you to consider. It is essential to look at the time periods, payments, and interest rates to find one that best suits your needs.
3. Loan Processing - At this stage, the lender needs to verify your employment, confirm the value of the home you are buying, get titles, and various other pieces of documentation or insurance.
4. Underwriting - Once all information has been gathered, the mortgage company will use it to determine if the loan is at an acceptable risk level or if they need additional information.
5. Closing Documentation - Your loan file is put through its final reviews to ensure all the paperwork and documentation are in order.
6. Loan Closing - Finally! It’s time to review and sign your documents and pay closing costs and title fees.
7. Loan Servicing - As you pay your monthly repayments, the mortgage servicer will continue to handle the administration of your home loan.

Not Having Your Finances in Order

If you want your loan application to be as smooth as possible, you must ensure your finances are in order. All of your documents need to be accurate and completed in full. The documents required are going to vary depending on your lender, but as a general rule of thumb, you will want to keep the following paperwork close at hand:

• Bank Statements
• Investment Accounts
• Financial Verification Documents (W2, Pay Stubs, Tax Returns)
• Alimony & Child Support Documents

Not Maintaining Your Current Employment

Are you thinking of making a career change? If you are about to apply for a mortgage in Tennessee, you can hold off on that for a few more months. Your employment history and income play a significant part in your home loan approval. A change in employment during the process could harm your application. It is better to wait until you have closed on your new home to start thinking about making career changes!

Waiting Until You Find Your Dream Home

As discussed above, when talking about the basic steps of the mortgage process, it is better to get pre-approved for a mortgage in Tennessee before you go house hunting. Don’t wait until you see your dream home to apply. Getting a mortgage approved can take time, and you may find that the house you fell in love with is gone by the time you are ready to move forward. When you have pre-approval, you can show sellers that you are prepared to make an offer and are a serious buyer.

Applying for Other Lines of Credit

Your credit score will play a significant role in your mortgage being approved. If you are applying for a mortgage in Tennessee, you should not apply for any other lines of credit, including credit cards, car loans, or store cards. Multiple credit checks before, during, or after your loan application process can harm your credit score. It may not stop your mortgage from being approved, but you may end up with a less favorable rate if you are seen to be taking multiple lines of credit out simultaneously.

If you need help applying for a mortgage in Tennessee, these tips will help you to steer clear of some of the most common mistakes. If you need further assistance, Flat Branch Home Loans, The Erica Kelley Group is on hand to help you find the perfect mortgage.

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Human-Centred Mortgage Loans

Whether you are a Veteran, a first-time home buyer, looking to refinance, or everything in between, Flat Branch Home Loans, The Erica Kelley Group specializes in finding the right home mortgage for you. It is our honor to help you acquire something that is "yours."

Call 615-423-3095 or email ekelley@fbhl.com