A Complete Guide to Getting Approved For a Mortgage |
Posted: July 18, 2018 |
So, you are about to take a huge step in your life – to buy a home of your own. Purchasing a home is definitely a very exciting experience. But at the same time, it could be quite overwhelming – especially for people who don’t have enough cash to pay a home at a full amount. And that’s where the beauty of mortgage comes into the picture. A mortgage is a legal agreement where a creditor, usually a bank, lends money at interest in exchange for getting the title of the property of the debtor, with the condition that the transfer of title gets void upon the completion of the debt. In order to help you with this process, here is a complete guide to getting approved for a mortgage. First of all, prepare the following information:
If you have been pre-approved by the creditor, then it means your financial documents have already gone through a review. Otherwise, you must provide your information immediately. The Process If they accepted the estimate, the lender might send your application, credit report, as well as financial documents to a mortgage processor for him to review. This is a company that reviews your applicants’ information and financial documents to confirm accuracy and that the house could be sold legally. The Appraisal A home appraisal is going to determine the proper value of a property. The lender is going to hire a professional appraiser to give an expert opinion on the estimate of the home. The appraiser is going to base their decisions on the size of the property and the house, its general condition, the location, as well as the amenities. If ever that the appraisal turns out to be lower than what was requested, then you will have the option of paying the difference. The Underwriting The lender is going receive a report when the appraisal and review are done. This report will then help the lender to choose if they are going to approve or deny the loan or request you for further information or more documents. If they are satisfied with the application, then they will most likely approve you after the underwriting. The Closing Disclosure You will get a closing disclosure that is sometimes known as a Mortgage Commitment Letter, at least 3 days before the closing date. This is going to give you enough time to make a comparison of the information in the document to the estimate of the loan. The Insurance Normally, a lender is going to ask for a proof of the home insurance. This is important for them to protect your investment, and honestly, you must have it either way. You will have to apply for insurance instantly after getting approved for the loan or contact your existing insurance company regarding the new address. The Closing So, you’ve made it! It is finally close time. The closing takes place during an appointment where you, the seller, the lender representative, the real estate agents, the attorneys, and the title company representative are there. All of you will review the final documents for the sale and sign documents to make the transfer of funds official. This is where you’ll have to pay your down payment and closing expenses.
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