Applying for pre-approval is the first step of the home loan process. This is a pending approval that lets you know the loan type and amount you may be eligible for.
So, you’ve been pre-approved, what are the next steps of buying a home?
Just like we talked about, pre-approval is the very first step of the homebuying process. You want to make sure you get pre-approved before even LOOKING at houses. Why?
Because, as stated above, pre-approval provides you with the estimated loan amount you’re eligible for. This provides you with budget guidelines and avoids the chance of falling in love with a home outside of your financial means.
Once you’ve been issued a pre-approval, then it is time to begin the house hunt! Working with a realtor is the easiest way to find a home that will fit all your needs and preferences. Don’t have a realtor in mind? Ask your Mortgage Consultant for their best recommendation on who to work with!
Found a home you love? It’s time to make an offer! This is another area where working with a real estate agent is the best choice! They will know how to structure and submit your offer, putting you in the best position possible.
The offer will most likely include some contingencies. What are these? These are requirements that must be met for you to follow-through with purchasing the home.
An example of this would be that the home appraisal must be close or over the loan amount, but not lower. This means the property is worth what you’re paying for it.
A home inspection is not always required but is a smart choice to make sure you know the condition of the home. This will reveal any potential issues not stated in the home’s listing.
Remember how we just talked about your real estate agent putting contingencies in the purchase offer, like the appraisal value? This is where that comes into play.
The appraisal is ordered by the mortgage lender to ensure the price you are paying aligns with the property value.
Once the home inspection and appraisal go through, the next step is sending the home loan to underwriting!
A good way to understand underwriting is to think of it as double-checking with a fine-tooth comb. This step ensures all information is completely accurate, that the details are perfected and there are absolutely no errors in the process.
Just a heads up, you might be asked to provide additional documentation during this step. Don’t be surprised! That is all part of the checking and double-checking process!
Approval of Loan
Once everything has been processed and approved in underwriting, the loan is signed off on. Then, the loan is off to the title company!
Why does the loan go to a title company? The title company will show the owner’s past property and change the ownership over to you. This helps keep the property in check legally and avoids any future issues.
Now for the FUN part! Closing day is the next and final part of the home loan process.
However, be sure to be in communication with your Mortgage Consultant up to and throughout closing day, as they will help you navigate the owed closing cost fees. These fees can be paid with a cashier’s check the day of.
Finally, the home is yours!
Are you ready to apply for pre-approval and get your homebuying journey started? Visit our website to begin an application today.