Ready to buy a home and not sure where to begin? Unless you have your own funds to fund your purchase, you will need to find a mortgage lender to obtain a loan. A mortgage is a loan from a bank or financial institute that is used to help finance your home. Finding a knowledgeable loan officer can help you with every step of the loan process. To start here is a six-step guide to your next mortgage.
Step One: Getting pre-approved
Shopping for a new home is very exciting but you don’t want to “put the cart before the horse” you must get pre-approved first and you will need a lender to pre-approve you. Pre-approval means that based on your income and credit, you should be able to get a loan (for a specific amount) as long as nothing changes with your credit score or financial situation. Once pre-approved, you will get a better idea of how much you can borrow.
“Get approved before you fall in love with a house. After you get pre-approved, don’t get any new loans, don’t make any large purchases, and don’t quit your job.”- President of Augusta Mortgage Company, Kevin McDougal said.
Step Two: Shopping for your home
The fun part, house shopping! With your pre-approval letter in hand, it’s time to view properties that meet your criteria. Your real estate agent will help you find a good match for you, negotiate on your behalf and help you structure an offer. If your offer is accepted you will be ready to apply for a loan.
Step Three: Applying for your loan
Now, you have to actually apply for the mortgage. Be prepared to submit bank statements, W2s, and any documents needed concerning your employment, income, assets, and debt.
Step Four: Loan processing and underwriting
Once the loan application and all the necessary paperwork has been turned in, your information is sent to the loan underwriting department.
Underwriters will access all of your information and make the decision if your application will be approved or not. The process can take up to 20 days.
Step Five: The Pre-close
Your lender will notify you once you are approved and will send over the loan file to the title company or attorney. You will then do a final walk-thru on the property and make sure that any contractual repairs were completed and that the home is vacant and move-in ready.
Step Six: Closing Day
Be sure to bring two forms of ID, a certified check or wire for the closing cost (if the closing costs are not included in the loan amount) and sign here, here, and here. Congratulations- you are now a homeowner!