Secure Lender Pre-Approval
When you are ready and feel confident you’re able to buy a home, work with a lender to get pre-approved. During the pre-approval process, the lender will examine your credit, your assets, and your income. You will need to provide some financial documents during this process, including pay stubs and bank statements.
After reviewing your financial information, your lender will determine how much your pre-approved loan will be worth. This is an essential step when buying a home, especially for determining your budget.
Of course, you can’t have a mortgage without a home. Shopping for a home is an entirely different topic, but suffice it to say that you should work with your real estate agent to find a property that meets your pre-approved loan’s value.
Begin Your Mortgage Application
Once you’ve gathered all of the paperwork and documentation, it’s time to submit your application. This process requires filling out the application, comparing loan documents and estimates, and then selecting a lender. Depending on your credit, the loan terms you want, and the lender, you may not get the exact loan terms you were hoping for. However, so long as you are in good financial standing, you should be able to get a good deal.
If you have any questions at all during this process, ask your lender for help.
Final Steps: Underwriting and Closing
Once your part of the application is complete, your lender will oversee the underwriting and closing process. If everything is approved, you should receive your mortgage and then can proceed to close.
Closing costs include the costs of title and loan officers and other parties involved with the closing. Usually, these costs add about three to five percent to the total price of the loan. These costs also ensure that all parties receive compensation for work done during the process.