When it comes to applying for a mortgage loan, timing is everything. The best time will depend on market conditions. So if your timing is right, you’ll be able to get lower mortgage rates. However, the process is easier said than done. This is why you need to gain a better understanding of the mortgage industry so you can predict the right time to take out a loan. What are these driving forces that cause mortgage rates to increase? How will you know your timing is right?
Understanding the mortgage business cycle
Lenders have business cycles that borrowers need to understand. The beginning of the month is intended for acquiring and setting up new mortgage loans. The middle of the month is dedicated to gathering documents and preparing loans for month-end. The end of the month is when lenders ensure they get as many loans closed or approved as possible.
When should be the time to start the loan application process?
The rule of thumb is within the first few business days of the month. Why? This is when lenders are searching for new business. Because they are done with transactions from last month, they’re looking for new applications to start the next month. If you’re a keen observer, you’ll know how eager loan officers are to review your loan options or return your phone calls. They’re willing to set an appointment with you to discuss the terms.
Avoid applying for a mortgage loan the last week of the month. This is the time when loan applications are in full swing. Although many lenders would like to consider new applications, full schedules with closing loans will cause them to let new loans fall to the wayside. While a mortgage officer is happy to take your application, it won’t be getting much-needed attention because they need to fulfill an existing pipeline. Chances are, you’ll get vague excuses as to why your application isn’t prospering and this will lead you to believe that you’re not the number one priority of the lender.
Mortgage loan expectations
If the first few days of the month are the best times to apply, should you be discouraged to apply late in the month? Not necessarily. You need to set your expectations, making sure that you are aware of the processing times. You can also improve your refinance experience when you organize everything. If the lender asks you to submit your financial documents, be sure they’re at your fingertips.
You should also try your best to submit a complete application. While it’s not a guarantee that your application will be processed faster, there’s a greater chance that you’ll not encounter problems. You also need to provide detailed explanation and information about your financial histories such as low credit score or employment gaps.
Expect delays as they are beyond your control. Once you have all the necessary documents ready, there’s nothing for you to worry about. By following the standard protocol set by lenders, you’ll be able to increase the possibility of mortgage loan approval.
Cape Coral Mortgage, Inc.
3512 Del Prado Blvd. S Ste106
Cape Coral, Fl. 33904
(239) 540 5555