There is a nasty rumor when it comes to financing a home….. That it is a long tedious process. Is it though? When you work with the right mortgage company you can be approved and ready to go within 15 days! The secret is to understand the process. When you know the “flow” of purchasing a home, you can make all the right moves at all the right times. So lets make this simple for you so we can relieve some of the headaches you may be fearing.
First Step – Application
When you apply for a loan the lender can see what you are working with financially, see what program would work best for you, and get you pre-qualified to start shopping for your home. Most realtors will not even start looking with clients until they get pre-qualified. It saves both you and the realtor time when you know what you can realistically work with.
Second Step – Shopping for Your Home
Once you have the pre-qualification and know what you can afford, it’s time to start house hunting. Here you would meet with your real estate agent to discuss your wish list and begin touring homes. Once you have made an offer and it is accepted, your home is officially “under contract”. It is here that the mortgage professionals will move forward with processing your loan.
Third Step – Inspections
Now it is time to get your home appraised and inspected. Depending on the loan program that works for you, there may be a few different required inspections. Such as water or septic inspections, termite inspection, etc. With the inspections you will have a thorough understanding of what the true value of your home is.
Fourth Step – Underwriting
The underwriting process involves comparing (you) the borrower’s application, credit card, and documentation to the loan program guidelines. They thoroughly examine all the fine details and confirm if you are prepared for a loan approval. The underwriter may ask for additional documents, this might go back and fourth a little bit. As long as you provide the documentation requested as soon as possible, there should not be any delay. From this, they declare if you are clear to close. “Clear to close” is the term you want to hear. It means you are approved and one step away from closing.
Fifth Step – Closing
Now that you know what works for you financially, found your home, and submitted all the requested documentation you are almost ready for your closing. Prior to your closing day the following needs to be finalized; insurance binder completed, review invoices, set closing date, prepare closing documents, final verbal verification of employment, and coordination with settlement company. Once this is completed, you are ready to show up closing day with pen in hand and ready to sign.
Hopefully these five steps have shed some light on the loan process so you don’t have to stress and can purchase your new home with confidence. When you are working with the right team, they will help and guide you throughout the process. It’s simpler than most people think.
