One of the most common questions I get from clients and prospective clients is "When should I apply?". The short answer is 'Now'. When it comes to timing your application, generally speaking the earlier you apply the better, and here's why.
When you submit a mortgage application, you are providing details regarding your income, assets, residential history etc. You are also giving consent for a lender to pull your Tri-Merge credit report. This is a credit report pulled specifically for the purposes of obtaining a mortgage and is pulled from the three major credit bureaus: Equifax, Trans Union & Experian. (FYI: Lenders will go by your middle score).
Now, if you are going home shopping this weekend, you should already be Pre Approved and ready to make offers. But what if you are not sure exactly when you will be at that stage, but you know it is on the horizon? Then that is even more reason to apply right now. You see, the credit report pulled will typically be valid for 120 days. So if you think you are likely to purchase a home in the next 4 months, applying ASAP is a great idea for the following reasons.
1. Applying early will give you the chance to optimize your credit. A good lender will be able to look at your credit report with you and tell you if there are any simple fixes that could improve your score. Don't think 20 points here or there matters? The difference in a 680 credit score and a 700 credit score could make a world of difference. You could qualify for a different loan program all together, cheaper mortgage insurance, or a lower interest rate which could save you thousands and thousands of dollars over the life of your mortgage. 🤑🤑
2. Applying early makes for a less stressful home purchase. Buying a home is a big deal, and it is important to get it right. You don't want to feel rushed through the process which is exactly what will happen if you wait until you are visiting open houses to apply. A good lender will educate you on your options before you go shopping so that you are armed with all the information you need to make a good decision for you and your family. Walking into an open house confidently with a full Pre Approval, knowing exactly what the monthly payments would be and how much it would cost to close is a much different experience than walking in blindly hoping you can afford it and crossing your fingers that the Krispy Creme Doughnuts 🍩 😋 are still warm.
3. You have nothing to lose. What do I mean by that? Many people are hesitant to apply because they think their score will drop drastically from the inquiry or they think that if there is anything negative on their credit or application the lender will deny them and it could prevent them from purchasing in the future. While submitting an application will result in a hard credit inquiry, this will only dock your credit score a few points, and is more than worth it to know exactly where you stand. If necessary, a good lender will work with you to create a detailed plan for you to follow to optimize your credit so that you get the best terms possible when your time to purchase comes.
Buying a home is a big deal, and you want to do everything in your power to make sure that you are in the best position possible when you get to the closing table. Applying for a mortgage can seem a bit daunting at times, but rest assured, the sooner you apply the better equipped you will be with the knowledge and credentials you need to make a confident and educated decision that will benefit you and your family for years to come.
If you're ready to apply, our online application takes less than 10 minutes. My team and I are here to assist, and answer any questions you might have.