Obtaining a mortgage may seem like a scary thought in today’s market, but there are plenty of great deals to be found for the right buyer. With a stock of foreclosures and short sales on the market, getting a great house for cheap is more possible than ever before. However, there is much to be learned about the mortgage process, some of which can even help keep you out of mortgage debt in the future.
Steps To Home Ownership
Many people assume the first step in securing a mortgage is finding a home to purchase when, in fact, obtaining pre-approval is the better first step. Knowing what you are qualified to borrow before shopping for a home is a good way to ensure you don’t overspend or end up under a contract you can’t afford. Getting pre-approved requires you to provide your financial details to a lender and, once approved, obtain a written commitment of lending.
After you are pre-approved and have then found a home you are interested in purchasing, you will be required to complete a loan application. This application asks details about your finances and the property you are interested in buying. It is a good idea to include a copy of your pre-approval with this application. From here your lender will begin working on the terms and conditions of your loan such as your interest rate, down payment requirement, closing costs and estimated monthly payment. The loan will be reviewed by the lender and, if the home appraisal matches at least what is being borrowed on the loan, will be approved. The loan must then go into escrow and title preparation, where the mortgage documents will be finalized and approved by the lender. Your signature on the final documents and payment of any closing costs will be due at signing.