Steps to getting a mortgage
The more you’re prepared, the smoother the mortgage loan application process
Step 1: Prequalification and application
1. Look at your budget
Ask yourself what you can comfortably afford while still meeting your financial obligations and goals.
2. Meet with your lender
Work with you lender to get a prequalification letter that you can share with your real estate professional when you start shopping for a home.
3. Submit your application
Submit the fee to process your application and get the ball rolling.
Build up your credit or beef up your savings well in advance of applying for a mortgage. Lenders like to see no delinquencies within the last two years.
Step 2: Conditional approval
1. Provide documentation
If you get conditional approval, you’ll have to confirm your employment status, income level, assets, debt information, etc.
2. Check your inbox
Watch for a conditional approval letter to ensure that your mortgage amount and savings will cover the purchase price and closing costs. Also, clear any conditions you must meet for approval.
3. Look at the price tag
Make sure you get an appraisal and that the appraised value of the house you want to buy is equal to or greater than the asking price. The bank will not loan you more than the house is worth.
Preparing for paperwork
Don’t make any major purchases or open new lines of credit for a few months before and during the application process. This will make the paperwork simpler.
Step 3: Final approval
1. Set realistic expectations
Because of the level of detail involved, it takes time for the underwriter to examine all the necessary documentation before approving your application.
2. Stay connected
Be prepared to get a few phone calls from your lender as more information might be needed.
3. Check your inbox
Keep an eye out for your final approval letter—you’re approved!
Acquiring new debt in the months prior to or during the application process might raise concern with your lender and could result in your loan being delayed.
Step 4. Closing
1. Sign your documents
Sign all your final loan documents.
2. Transfer down payment
It’s time to transfer certified funds for your down payment.
3. Pat yourself on the back
Congratulations, you did it—you’re officially a homeowner!
Setting a date to close
The time it takes to close can vary. Have a clear conversation with your lender to set realistic expectations for a comfortable closing date.
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