A new home is always exciting. But the mortgage process can be rather overwhelming. Knowing the right steps to take can help make the process smoother. Here are the ten steps you need while applying for a home loan.
Submit your application
Start by finding a home and a lender you want to work with. Then fill out the application the lender gives and put together the documents related to your income, debts, and assets they request.
Order a home inspection
Schedule a home inspection quickly so that you have enough time to negotiate with the seller in case there are any issues about the home you need to be aware of.
Be responsive with your lender
If you’ve qualified for a mortgage, you’ll receive conditional approval from the lender. They may require additional documents, and you should respond promptly to keep your application moving.
Buy homeowner’s insurance
Before you receive final approval on your mortgage, your lender will need proof that you have homeowner’s insurance.
Keep an eye on the process
Your lender will order a home appraisal to compare its value with the purchase price. They’ll also visit the site and compare its value to other homes in the area. They will then conduct a title search to ensure there are no outstanding liens on the home.
Don’t take new debt
During this process, don’t open new credit cards or take new loans, or anything that would affect your debt-to-income ratio and hurt your chances of getting your mortgage approval.
Lock in the rate
Remember to lock in your interest rate no later than 10 days prior to your closing date. Sooner would be better.
Review documents
Once the loan is approved and inspection and title search are done, the lender will set a closing date and inform you about how much money you will need for closing.
Down payments and closing costs
Arrange a wire transfer or get a cashier’s check to cover your down payment and closing costs.
Close the deal
Read all the documents, ask questions about the terms, and only when satisfied, sign everything. Finally, take the keys, unlock the doors to your new home, and celebrate.
