You’ve decided to move forward with obtaining a mortgage—what’s next? The mortgage loan process doesn't have to be difficult. Your loan officer will guide you every step of the way, ensuring you feel confident and informed. Below is a summary of the mortgage loan process so you can understand what to expect.
1. Pre-Approval
If you are looking to purchase a new home, you will want to start by getting pre-approved for a mortgage. This involves a loan officer reviewing your financial situation, including your credit score, income, and debts, to determine how much you can borrow.
2. House Hunting
With a pre-approval letter in hand, begin searching for your new home. Work with a real estate agent to find properties that fit your budget and needs.
3. Loan Application
Once you've found the perfect home and your offer is accepted, you will complete a loan application. You will want gather the remaining necessary documents like final income documents, bank statements, and homeowners' insurance information. If you are refinancing your loan, you will start here with the loan application.
4. Loan Processing
Your loan officer will process your application, verifying the information provided. This includes ordering an appraisal to determine the home's value and title documents to ensure there are no legal issues with the property.
5. Underwriting
An underwriter will review your application and all supporting documents to assess your ability to repay the loan. They may request additional information during this phase.
6. Cleared to Close
Once approved, your loan officer will work with the title company to schedule the closing and to finalize all the fees to determine your final funds that you will need to bring to the closing table.
7. Closing
It's closing time! Usually closing takes place at either the title company or your home. This is where you will sign all of the final documents and supply the required funds by certified check or wire. If you will be wiring money it is very important that you reach out directly to the title company that you are working with to obtain their wire instructions. Wire fraud is on the rise so always verify the wiriting instructions with the title company before sending money anywhere!