Your Ultimate Guide to Securing a Mortgage Loan
Before you can get your dream house, you have to go through the daunting process of securing a mortgage loan first. We all know how much home sellers and real estate agents love to sell their homes to you when you’re already pre-approved or have secured a mortgage loan.
To speed up the process and ensure that everything will go your way, simply follow this ultimate checklist for securing a mortgage loan:
Get your finances in order and prepare the necessary documents
Having well-established finances is almost a fool-proof guarantee that you will secure a mortgage loan. Many people have dreamed of becoming homeowners but have failed to do so because of disorganized finances.
- Credit score
- Financial statements
- Bank statement
- Tax returns and proof of income
- Retirement and investment accounts
- Property tax bills
Get pre-approved
Well done on organizing your finances and preparing the necessary documents. You now have to get pre-approved for a loan to show the home seller or the seller’s agent that you’ve done your part.
- Employment verification
- Proof of income
- Good credit
- Proof of assets
- Other documentation requirements by the mortgage lender
Determine your budget
In determining your budget for monthly mortgage payments, consider the stability of your income. Another thing is that if you have already saved up for a down payment, then you will likely take out a small mortgage.
Shop for homes around
After those tedious mortgage things, it’s finally your time to shop for homes around. In doing so, prepare the following checklist:
- Criteria for a home
- Budget range
- Home seller info sheet
- Neighborhood amenities
Make an offer
In this step, talking to your trusted real estate agent will make things a lot easier. There will be mostly negotiations after making an offer, and having a real estate agent can help you fight for your best interest.
Order a home inspection
Following the acceptance of your offer, the next step in the mortgage procedure is usually a house inspection. When you do a thorough house inspection, you learn important things about the house that aren’t obvious from the outside.
- Home’s structure
- Foundation
- Electrical
- Plumbing
- Roofing
Rate shopping and choosing a lender
When looking for a mortgage lender, keep in mind that your rate isn’t solely determined by your application. It also depends on the loan you qualify for. Each lender has its own varying interest rates, so it’s important to look around before settling for one.
Complete a full mortgage application
After completing your full mortgage application, you’ll receive a loan estimate within three days with the specific rates, fees, and terms of your offered home loan.
Have the home appraised
Most lenders work with a third-party company that isn’t affiliated with them. The assessment ensures that you are paying a reasonable price for your home.
Mortgage processing and underwriting
After submitting your full mortgage application, its processing follows, as does the underwriting. Verification of your financial documents is undertaken to ensure credibility. The underwriter usually focuses on the 3 Cs: capacity, credit, and collateral.
Closing day
You’ve reached the end goal already. The last step is all about reviewing and signing closing documents, receiving keys, and starting to move as a new homeowner.
Also Read: The Home Buying Process Roadmap
