You’ve finally found your dream house. Now you need to navigate the overwhelming and confusing mortgage process. Here’s a step-by-step guide on how to do it.
Before the Loan Is Approved
Submit Your Application
Your lender will ask you to fill out an application form and provide supporting documentation to show your income, debt, and assets.
Schedule a Home Inspection
If the inspection reveals something unforeseen, you will still have time to negotiate a better price with the seller before the closing date or have the current homeowner fix the issues.
Cooperate with Your Lender
Once you’ve received conditional approval on your application for a mortgage, your lender may ask for additional documents. At this stage, it’s important to respond right away to keep your application moving. Don’t stall on providing whatever your lender needs.
Buy Homeowner’s Insurance
You need this for your loan to get approved. Read your insurance policy carefully and make a note of exclusions to coverage, the limit on claims, and the replacement cost if your home is destroyed.
Know What’s Going on Behind the Scenes
While your application moves forward, the lender will order a home appraisal. This is to ensure that the value of the property aligns with the price you bought it at. There is also going to be a title search to check that there are no outstanding liens on the house.
Avoid Taking on More Debt While Your Loan Is Being Processed
Don’t open new credit cards or make major financial changes. This impacts your debt-to-income ratio and harms your mortgage approval application.
Decide on A Suitable Interest Rate with Your Lender
It’s best to do this at least ten days before the closing date.
After the Loan Is Approved
Review All Documentation
At this stage, your lender will set a closing date. Review documents and find out how much you need to pay on the closing date.
Estimate Your Closing Costs
You may need to bring a cashier’s check or wire money to cover your down payment and closing costs, so arrange for all this before the closing date.
Close on Your New Home
On the closing date, read all the documents and clarify what you don’t understand.
