Banks and lenders issued 3,591,794 residential mortgages in the third quarter of 2021?
There are a lot of processes involved when buying a home, from dealing with realtors to loan officers and home inspectors. Unfortunately, the home buying process can stretch up to four or five months.
The home buying timeline is usually divided into two segments: finding a home and closing on your home loan. Once your home loan is approved, the buying process takes less than 30 days.
But what procedure should one follow to close on their home loan?
Read our homebuyer’s guide to home loan process steps to prepare yourself.
The first step when buying a home is getting a mortgage preapproval. Here, the lender pulls up your credit history and verifies your income to determine how much you can afford.
The mortgage lender then issues a preapproval letter indicating how much they are willing to offer you. Having a preapproval letter offers an advantage by strengthening your offer.
If you are a first-time homebuyer, engage different lenders and weigh available home finance options.
Fortunately, applying for preapproval is fast and easy. Some lenders even allow customers to apply online.
Shop for a Home
The next step is finding the right home. You can decide to take the quest by yourself or hire a real estate agent to help you find a good home.
A good real estate agent should link you up with listing services to help you know what homes are on sale near you. What you should know is real estate agents act as a guide by presenting homes that fall within your budget.
Some go ahead to suggest homes located in neighborhoods that fit your lifestyle.
Provide an Offer
Once you find an ideal home, your real estate agent should help you make an offer based on your budget. The offer letter communicates the terms of the sale and how much you are willing to spend.
Here the timeline is flexible, considering the seller can accept or reject the offer. Others will negotiate on the terms before closing the deal.
Apply for Mortgage
Once you reach an agreement with the seller, it’s time to apply for a mortgage. Ensure your present your preapproval letter to speed up the process.
Smart homeowners gather and compare mortgage rate quotes from different lenders. As such, it’s easy to decide which lender is affordable and which one is not.
Once you settle for a particular lender, be sure they’ll schedule for an appraisal and underwrite your loan.
Close on Your Home
The final step is closing on your loan once the appraisal is done and the lender underwrites your loan. Normally, the lender will issue you a closing disclosure.
This document summarizes the terms of your loan, including the APR and what you should pay as the closing cost.
Home Loan Process Steps Simplified
Once you make it all the way to the closing day, all the trouble is rewarded with a new home. Getting across the finish may seem impossible.
But once you are familiar with the home loan process steps, the process should be easy to navigate through. To speed up the home buying process, start by saving for a home in advance and maintaining a good credit score before applying. Also, hold off applying for additional credit.
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