The steps to getting a mortgage sound easier than they really are. Fortunately, we have professionals throughout the process to help guide you or your client from pre-approval to closing. Let's look at the 6 basic steps to getting a mortgage so you're prepared.
Before You Begin, Get Pre-Approved
Pre-approval is so important to home buying. Most sellers won't consider an offer on a home without pre-approval, as it shows that the potential buyer has the ability to purchase and pay for the home. It is also important as the pre-approval process uncovers anything that may lead to underwriters declining your mortgage application later.
The Six Steps to Getting Mortgage Loan
Now that you've been through pre-approval and have picked out your next home, it's time to go through the mortgage loan process.
1. Apply for the Mortgage
Usually, you'll apply for the mortgage with the same lender who pre-approved you. However, you'll still need to submit a new mortgage application. Most of the information will be a revisit of your pre-approval application.
2. Gather and Submit Documents
Once you submit the application, it's important to submit supporting documentation. This will include but is not necessarily limited to, proof of income, tax documents, and other information that supports your mortgage application. Your lender will advise you of what documentation they will need when you apply for the mortgage loan.
3. Underwriting
Once you've gathered your documents, your application goes to Underwriting. Here, an underwriter goes through your application and documentation. They make sure everything is in order, and that your application meets the requirements of both the lender and finance laws. If necessary, they may require additional documentation or clarifications.
4. Appraisal Ordered and Title Search
When your application comes out of Underwriting, your lender will request an appraisal of the home as well as a title search. This ensures that the home's value is equal to or greater than the seller's asking price. It also ensures that there are no tax liens or other problems with the title that the seller may not have revealed.
5. Clear to Close
If the home passes appraisal and title check, your application returns to Underwriting. Here, the Underwriters do a final review of the application as well as the appraisal and review of the title. If everything is in order, they mark your loan as Clear to Close.
6. Closing
Once the underwriter has cleared your loan, you move to Closing. In this stage, documents are drawn and sent to the title company and the closing meeting takes place. You have a three-day period to review the closing disclosure and review all terms of the loan. Small changes can be made, but anything major will put the loan back into the process as they have to be reviewed by underwriting. This is also the stage where closing costs are handled, depending on how they were negotiated or if they were rolled into the loan.
Are You Buying a Home?
Now is an exciting time to buy, but you or your clients may still have questions about the steps to getting a mortgage. Let me help you or your clients reach their dream of home ownership. Go to www.meetwithmarat.com to schedule an appointment and talk about your or your client’s options.