5 Milestones When Applying For A Mortgage
Purchasing a home can seem like a drawn-out, complicated process with never-ending paperwork. When preparing to apply for a mortgage, it’s important to understand the importance of each step of the process. Knowing what to expect can make the process seem less confusing, help buyers stay on top of required paperwork, and be aware of any additional costs and fees that may arise. The following can help guide buyers through the five major milestones when applying for a mortgage.
You’re ready to buy your first home – congratulations! Pre-qualification is the first step of the homebuying process. Getting pre-qualified is fast and easy, requiring no cost and no commitment to a specific lender. Pre-qualification can be done in person, over the phone, or by filling out an online form. During pre-qualification a lender will estimate the maximum monthly mortgage payment and loan amount buyers can afford; many real estate agents ask for proof of pre-qualification before kicking off a home search.
After finding a home, an offer is made to the seller. At this point, the buying agent and selling agent negotiate on behalf of the buyer and seller to agree on a price. Once an agreement has been reached, the loan application process begins. During the application process, buyers will need to provide the loan officer at their lender with a variety of documents including documentation of income and assets, pay stub, tax returns, or bank statements. To keep the loan on track for an on-time closing, ensure all documents are submitted in a timely manner.
During mortgage processing, the necessary documents have been submitted and will be reviewed for accuracy. The loan processor will then pass the application package on to an underwriter. The loan officer will also order the appraisal and title work during this time.
When a loan reaches this milestone, an underwriter will review the entire loan application to determine if it meets the guidelines for approval. This includes reviewing a borrower’s credit score, assets, employment, appraisal, and any additional documents that have been provided. Once the conditions for approval have been met, the underwriter will clear the loan for final approval and the loan is ready for closing.
Reaching closing means the mortgage process is at an end! A closing date, time, and location are established in escrow; this is when the buyers and sellers will meet to sign the final paperwork and transfer ownership of the property. At least three days before closing, the closing disclosure, or CD, is available; this verifies the terms of the loan and gives borrows the amount they will need to bring to closing. Once at settlement, funds from the mortgage are distributed, the final documents are signed, and ownership of the property is transferred. Congratulations!
by Author, March. 26, 2020