A mortgage is a loan that you use to pay for a house purchase. Getting a loan is not an overnight process, though. It takes time and requires steps. If you are ready to house hunt and buy a home, here are some of the things you should expect during the mortgage process.
You Should Get Preapproved Before House Shopping
Although it may not be a standard requirement, you should get preapproved before shopping for a home. Getting preapproved gives you the security of knowing that you meet the guidelines for a loan. It helps you know how much you can afford, too. Starting with the preapproval process is the best place to begin.
Find a House and Let the Lender Know
Next, you should choose a house. You cannot start the home loan process until you select a house you want to buy. Getting preapproved does not guarantee that the lender will issue a loan, mainly because the lender needs to know what house you are buying before they will approve the loan. When you notify the lender of the house you want to buy, they can begin working on the process.
The Lender Works on Closing Steps
The lender must complete many steps before you can close on the house. One step is ordering an appraisal. Your mortgage lender must make sure the house value is high enough. If it is too low, they may not give you a loan for the purchase, or they may lower the amount they will lend you. Your lender has a lot to do during this step, and it will likely take several weeks before they can approve the purchase.
The Loan Goes to Underwriting for Final Approval
When the lender completes all the steps, they will send your loan documents to underwriting. Underwriting is a department that analyzes your financial information and details about the house. You cannot close on the house until underwriting approves your file.
You Close on the House
You can close on the house once you hear from your mortgage lender that underwriting approved the loan. Closing is the process that requires signing all the loan documents and taking possession of the house you are in the process of buying.
These are the steps you should expect during the process. To get started now, you should talk to a lender about getting preapproved for a home loan.
For more information, reach out to mortgage broker services in your area.Share