Competition is good
There are many lenders in the mortgage market, and that is good news for borrowers. When several lenders compete for your loan, you tend to get better interest rates, better down payment options and better mortgage terms overall. The catch is that competition only helps you if you actually put it to work.
Too many Iowa buyers walk into the bank where they have a checking account, accept whatever that bank offers and never see what else was available. Sometimes that works out. Often it leaves money on the table, or worse, ends in a no that another lender would have turned into a yes.
Shop around
You can safely get a mortgage from any certified lender licensed in your state. You are not limited to your bank or the lender your real estate agent mentions first. Different lenders specialize in different borrowers. One may offer the best pricing for high credit scores, another may be more flexible after a bankruptcy, and another may understand self-employed income better than anyone.
Check with a mortgage broker
Shopping lenders one at a time has a hidden cost. Each time a lender runs your credit report, it can lower your score, and several hard inquiries in a row can push a borderline borrower below a program's cutoff.
A mortgage broker solves that problem. A broker works as an intermediary between you and multiple lenders, so one application can be presented to several of them. You get the benefit of competition without the damage of applying everywhere yourself. For borrowers with poor or no credit history, that flexibility can be the difference between approval and denial, because the broker already knows which lenders are likely to say yes.
A quick look at some of the possibilities
Many buyers are surprised by what is available once they look beyond a single bank. Here are a few options we arrange regularly.
| Feature | What it means for you |
|---|---|
| 100% financing with a 580 score | Possible in some cases, often by pairing FHA with assistance |
| Scores as low as 500 | FHA financing with a 10% down payment |
| Self-employed bank statement loans | Qualify with bank deposits instead of tax returns |
| FHA Streamline and VA IRRRL | Simpler refinances to lower the rate later |
| Grants up to 5% of the price | The IMS Homebuyer Grant for 620+ scores |
Learn more about each on our less than perfect credit, FHA and grant program pages.
Footwork
Approval is faster when your paperwork is ready before the lender asks. Gathering documents early also lets your loan officer spot problems while there is still time to fix them.
Documents to gather before you apply
- Pay stubs covering the last 30 days
- W-2s or 1099s for the past two years
- Federal tax returns, especially if self-employed
- Two months of bank and asset statements
- Photo ID and Social Security number for the formal application
- Explanations for any recent credit events
While your loan is in process, avoid opening new credit, making large purchases on credit or changing jobs if you can help it. Lenders check again before closing, and a change can delay funding.
In conclusion
Getting approved for a mortgage is not just about your credit score. It is about matching your full situation to the right lender and the right program. Shopping around helps. Doing it through a mortgage broker helps more, because you gain access to multiple lenders while protecting your credit. If you have been turned down before, or you are not sure where to start, call Iowa Mortgage Solutions at 319-377-1988. We have been helping Iowa families get approved since 2005.
