Getting a Mortgage – From Beginning to End
Purchasing a home is incredibly exciting and stressful. Knowing as much as possible before you purchase is the key to reducing stress.
Getting A Mortgage From Beginning to End
The mortgage process can often be a confusing one. Most homebuyers are interested in their dream home, not their lender. Throw in endless forms and document requests, and the mortgage process can quickly become miserable. Here is an overview of how it works, which will hopefully cut down on your stress.
Searching for the best loan is the first step. The best loan for you is entirely dependent upon your situation. A low-interest rate may be a key for one person, while a low down payment might be critical for another. Other factors include your credit score, length of the loan and so on.
Getting pre-approved is not a required step, but you should do it. This single step will cut the stress factor of buying a home by at least half. Instead of sweating your loan application during escrow, you can relax because you are already approved. This free time gives you the opportunity to nag the seller for breaks on the home purchase! Many people make the mistake of providing the minimum amount of information possible. Don’t! If you have credit problems or some other negative, the lender will find them. Provide as much information as possible on your application.
A lender is not going to take your application at face value. They will ask then verify. Unlike applying for a credit card, the lender wants to see supporting documentation. You will commonly be asked to submit tax returns, pay stubs, bank account statements, investment account statements and so on. During the pre-approval step, an underwriter is analyzing your information along with your supporting documentation and determining your ability to repay. Once you are pre-approved, you will be provided with a pre-approval letter. The pre-approval letter is the next best thing to a cash offer. This will set the budget for you and your Realtor to start shopping for a house. Your pre-approval letter will also tell sellers that you have a lender who is ready to lend you the money to buy their house.
Welcome to the mortgage loan process! Now that you found the home of your dreams and more importantly, the seller accepted the offer you and your Realtor put together it’s time to open escrow. Appraisals, inspections and title searches will next be ordered on the property. The lender wants to make sure the seller has the right to sell it, the home is in good shape and it is worth enough to justify the loan. There isn’t much you can do during this step, so relax.
At this point, the loan is processed to get everything in shape for the underwriter review. The underwriter is the “buck stops here” person for the lender. The underwriter will approve or deny the loan. They may also ask for additional information or offer adjusted terms. If this occurs, you can make counter offers.
Assuming the loan is approved, commitment time is the next step. Yep, you will sign the loan documents. This sounds simple, but many people can’t help but get nervous about committing to the repayment of hundreds of thousands of dollars. Just do it!
Assuming everything is going well with the purchase, the next step is closing. The lender will wire money to the title company, escrow will close and you are the proud owner of a new home and hundreds of thousands in debt!
Could buying a home really be stress-free? Yes! It is possible. Let LendPlus walk you through the entire home buying process! To speak with a licensed mortgage banker, apply here!