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Home Loan Process

Finding a new home can be fun and exciting time in your life, but working through the mortgage process can be overwhelming for some people. If you know the steps you need to take can help the process go a little more smoothly.

  1. The Pre-approval. Also known as getting pre-qualified, this is the first step to buying a home. You will submit some basic paperwork some as current pay-stubs and previous year’s tax return and a mortgage lender will determine if you could qualify for a home and how much you can afford. They will look at your credit score, your current debt and your ability to pay the loan back. Then they will make a decision on your credit worthiness. If pre-approved then you can start shopping for a home in your price range.

Once you have an accepted offer, here’s what you need to know to make sure your mortgage application stays on track:

  1. Submit your formal application. Now that you’ve found the home you want to buy and a lender to work with, the formal mortgage process begins. At this stage, your lender will have you fill out a full application and ask you to supply or verify the documentation relating to your income, debts and assets.
  2. Order a home inspection. Schedule a home inspection as soon as you can. Doing so will give you adequate time before your closing date to negotiate with the seller if the inspection reveals any unforeseen issues.
  3. Be highly responsive to your lender. If you applied and qualify for a mortgage, you’ll receive conditional approval. At this stage, your lender may require additional documentation. Make sure to respond promptly to keep your application moving forward. Delaying something like sending over more documents, even by just one day, can almost move your file to the bottom of the loan processors stack of files.
  4. Purchase homeowners’ insurance. Your lender will require proof of insurance before the loan can receive final approval.
  5. Let the process play out. Know what’s happening behind the scenes: Your lender will order a home appraisal to ensure that the value of the home you’re buying is in line with the purchase price. The appraiser will visit the home and compare it to other recently sold homes in a similar price range. Your lender will also order a title search to make sure there are no outstanding liens on the property. Learn more about the home appraisal process
  6. Avoid taking on new debt. While your loan is in process, avoid opening new credit cards or making other major financial changes. New loans or other changes that affect your debt-to-income ratio could get in the way of your mortgage approval.
  7. Lock in your rate. If you haven’t already locked in your interest rate with your lender, you’ll want to do so. Your rate must be locked in no later than 10 days prior to your closing date.
  8. Review your documents. Once your loan is approved and your inspection, appraisal and title search are complete, your lender will set a closing date and let you know exactly how much money you’ll need to bring to your closing.
  9. Arrange to pay your down payment and closing costs. You’ll need to get a cashier’s check or arrange to wire money to cover your down payment and closing costs. Estimate your closing costs
  10. Close on your home. At the closing, be sure to read all the documents you receive and ask any questions you may have about the terms of the agreement. Then, after you’ve signed everything, you can unlock the door and celebrate your new home!

Please contact us with any other questions that you may have about the mortgage or pre-approval process. We could also recommend a few mortgage companies to speak with.