What to Know About Applying for a Mortgage in Another State

Maybe you just accepted a job in another city and need to relocate. Or perhaps you work remotely and are finally moving to your dream state. Whatever your situation, buying a home somewhere you don’t currently live add a few wrinkles. You have to run your home search from a distance while also getting a mortgage approved. Here’s what to know before you start.

1. Check Licensing First

Mortgage companies are licensed state by state, so the first question to ask any lender or broker is simple: Are you licensed where I’m buying? It’s an easy thing to overlook, and it’s the fastest way to rule a company in or out before you invest time in a conversation.

2. Consider Using a Mortgage Broker

A broker is worth considering even when you’re buying in your own backyard, but it’s especially helpful when buying out of state. Calling around to lenders in a community you don’t know can be overwhelming. You can’t necessarily lean on friends and family for a recommendation, and you may have no idea who is reliable.

A broker does that leg work for you. We shop our lender network on your behalf. Because we work with those lenders every day, we know how they price, how they underwrite, and how they perform when a closing date is on the line.

3. You Can Apply and Get Pre-Approved Remotely

You don’t have to be physically present to apply for a mortgage. You can have a virtual consultation, apply online, and get a pre-approval letter without ever setting foot in an office.

That pre-approval does two jobs. First, it tells you how much home you can afford, which narrows your search before you spend a weekend flying in to tour houses. Second, when you’re ready to write an offer, it tells the seller you’re a serious buyer. That can be especially important when you’re the out-of-town name on the contract.

4. Be Clear About How You’ll Use the Home

This is one of the questions we get most often on out-of-state purchases, and it has a real effect on your loan. A home is financed as a primary residence, a second home, or an investment property. Each one is priced and qualified differently.

If you’re relocating, the loan can usually be written as a primary residence, but the move needs to be genuine. Lenders will typically want to see something that supports the relocation, such as a job located near the new home. They’ll also expect you to move in within a reasonable window after closing, commonly around 60 days.

Tell your loan officer your actual plan up front. It’s much easier to structure the file correctly at the start than to rework it a week before closing.

5. Ask How Your New-Job Income Will Be Counted

Relocating often means being approved before your first paycheck arrives at the new job. That’s usually workable. Depending on the loan program and lender, a signed offer letter or employment contract can often be used to qualify. Relocation packages, sign-on bonuses, and temporary housing allowances may also be reviewed on a case-by-case basis.

The details matter here, including your start date, pay structure, and whether the income is salaried or variable. Bring your offer letter to the first conversation rather than waiting until you’re under contract.

6. Budget With Local Numbers, Not the Ones You’re Used To

Property taxes, homeowners insurance, and closing costs vary widely from state to state. The same purchase price can produce a noticeably different monthly payment than what you’d pay back home. Because taxes and insurance are part of how you qualify, they can affect your buying power too.

Ask early for a payment estimate that uses real numbers for the county where you’re buying. This allows you to build your budget around where you’re going instead of where you are now.

7. Account for Relocation Costs

When you’re figuring out how much home you can afford, most of your attention should go to the ongoing costs of homeownership. But if your budget is tight, don’t forget what the move itself costs:

• Packing and moving, including hiring movers or renting a truck
• Time out of work for the relocation
• Gas, flights, and other travel
• Replacing furniture and items you can’t take with you
• Temporary housing, such as hotels or a short-term rental

Moving costs can quickly add up to thousands of dollars. Planning for them can help keep you from feeling stretched during the first few months in your new house.

8. Ask How Closing Will Work in That State

Applying remotely is easy but closing procedures vary. Some states allow remote online notarization, while others require an in-person signing. A few are attorney-closing states.

Ask about the closing process early so you know whether you need to book a flight, schedule a mobile notary, or plan for a mail-away closing.

Buy a Home in Missouri or Beyond

Buying from out of state takes a little more planning, but the mortgage process can still be smooth and simple. Whether you’re shopping for a home in Missouri or any of the 40+ other states we serve, McGowan Mortgages can help make the process quick and easy.

To get started, call (816) 631-9687 to schedule your consultation.