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Email Us to get your pre approval started and read below for all of the steps for your home loan:
Step One
The first thing you should do before you even begin your home search is to think of the financing that you are going to be able to get. You will need to speak with a mortgage loan officer and have them take a look at your finances and check your credit so they can come up with a financing plan of action for you. They will be able to tell you how much home you can afford, what your approximate payments would be, how much money you will have to bring to closing, and what types of loan programs that you qualify for. Knowing all these things will also help your home search go much more smoothly so that you can focus on the right types of homes for your budget. Your loan officer will also give you a Pre-Approval Letter that you will be able to include with any contract offers that you present to sellers to show them that you have been approved to receive a home loan.
Step Two
Once you have an executed contract you are now ready to obtain an appraisal and a title report for the property that you plan to buy as soon as possible. The loan process can not truly begin until the lender receives these things.
The appraisal will give you and your lender an appraised value for the home and also let the lender know the physical details of your home. They will want to know things like if it is a condo rather than a single family home, the proximity to certain landmarks, and the level of home completion. I have seen homes not get approved because they were in the middle of a remodel so things like that are always something to be aware of and prepared for.
The other important report that the lender will require is the title report. This will let them know if there are any liens on the home that would affect the change of title from one owner to another. They need to make sure that the title is clear so that they can be placed on title along with you so they are able to reclaim the property if you decide not to pay your mortgage. On the other hand, once/if you pay your home off you need to make due diligence to have the lender’s name removed from title so that it is just in your name.
Step Three
Now that the lender has received your executed contract, your financial documents, and your title and appraisal reports, the loan process can begin. The lender starts to verify all the information given and check the loan file against their specific guidelines.
The four main things that they will be verifying are:
- Your employment history
- The payoff to your current mortgage (if you have one)
- Insurance coverage for the new loan
- Verification of your mortgage history
Step Four
Your loan will go into what they call “Underwriting” and an underwriter will be assigned to your case. The underwriter looks at the whole loan package and checks it against their guidelines, looks for any fraud, and will come back with a list of “conditions” that will need to be met in order to get the loan fully approved. These conditions are usually small things such as an updated paystub or a copy of your driver’s license or anything else that may have been overlooked but it can also be a significant item as well. One example of that would be if the appraisal states that there appears to be foundation damage. In many cases an underwriter will then request that a Structural Engineer’s Report be obtained to show whether the home is structurally sound or not. This is not too common and your loan officer will help you through any issues such as these.
Step Five
Once you have received final approval, your loan will be moved onto the lender’s funding department where they will prepare closing instructions and documents and sent them over to the title company you will be closing at. Your loan officer will also help you schedule your closing and will be in contact with the title company, the lender, and you of course! You then go to the title company and an escrow officer will go over your closing documents with you. (You should also have your loan officer’s contact number handy when you go so you can call them with any questions should they arise.)
**Tips**
- Do not allow your credit to be pulled by others during the loan process. You credit is typically rechecked by your lender right before your loan goes to closing. If anything has changed it can affect your approval status.
- Do not attempt to buy any expensive items.
- Continue to pay all bills and your current mortgage timely until your loan has closed and funded.
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