So you’ve made an offer on a home you would like to buy. That means you’ve been preapproved for a mortgage, you’ve found your real estate agent and you have selected a mortgage company that you would like to work with – now what? From making an offer to closing on the home, there are a variety of milestones during the mortgage application process. Your loan officer will be there to guide you every step of the way and will be available to answer your questions.
If you’re new to the process or a first-time home buyer, here are some of the key checkpoints you can expect during the mortgage application process.
Conduct A Private Home Inspection
Once your offer is accepted, the home will need to undergo an inspection. This inspection will shed light on what you can’t see just by looking at the surface. Some things inspected include foundation, home structure, plumbing, electrical, and roofing. This inspection will reveal any costly repairs for the buyer. Any findings, during the inspection, can assist with negotiating the sale between the seller and buyer.
Complete A Full Application
Once you’ve selected a reputable mortgage company, it’s time to complete a full application. The lender will need the purchase agreement from the sale and formal proof of your cash deposit. Be ready to provide income information as well as asset documentation. For a thorough explanation of all the documentation necessary, click here. Once everything is in, you will be provided with a loan estimate with your rate, fees, and loan terms.
Order the Appraisal
Your mortgage lender will contact an appraiser. The appraiser will provide a clear estimated value of the home you are purchasing. The appraiser will give you insight on whether or not you are paying a fair price for your dream home. Keep in mind that the home must appraise for the purchase price that was contracted. The appraisal will take roughly one week to be completed and reported back.
Processing and Underwriting
Mortgage processing begins as soon as your full application has been submitted. As a buyer, this will be your waiting period. It starts with a loan processor who will prepare your information and file for underwriting. Your application information goes through verification. Any credit supplements, tax transcripts, and title work will now be ordered. If you have any late payments, judgments, or collections, you will need to provide a written explanation. You want to be sure to respond asap to any requests to ensure a smooth, quick underwriting process. Once the processor has completed their end of the bargain, it is sent to the underwriter. The underwriter’s job is to take a detailed look at all the information provided and make sure everything checks out.
Close on the Home
Congrats, it’s closing day! Your mortgage company will deliver all closing documents, with preparation instructions, to the title company or assigned attorney. One important document you will be signing is the closing disclosure. This will have similarities to the loan estimate you received previously. This estimate provided you with expected costs, while the closing disclosure confirms those costs. Once the documentation is ready for you, you’ll sign everything, get the keys to your dream home, and become the new homeowner.