Obtaining a home loan can be a significant milestone in your journey towards home ownership. It is a complex process that requires careful planning, research, and understanding of the various steps involved. This comprehensive guide aims to provide you with a step-by-step walk through of the home loan application process, enabling you to navigate through it with confidence and ease.
Step 1: Get Pre-Approved for a Mortgage
Before you start house hunting, it’s essential to get pre-approved for a mortgage. This process involves working with a lender who will assess your credit profile, income, and other financial information to determine how much money you can borrow. Once you are pre-approved, you’ll know how much you can afford to spend, and be in a stronger position to negotiate with sellers.
To really set yourself apart from other buyers, you can get Approved to MoveTM by Embrace Home Loans, which will give you a fully underwritten approval before you even find your dream home. With Approved to Move™, all your information is verified – bank records, tax statements, income, assets, credit scores – giving you an offer as close to cash as possible and good for 90 days.
Step 2: Work With a Real Estate Agent
Once you’ve been pre-approved, it’s time to work with a real estate agent who can help you find your dream home within your budget. They can also help you navigate the real estate market and provide valuable advice on what to look for during home inspections. A licensed REALTOR® will be able to give you insight into the best neighborhoods or locations for your specific situation – including proximity to schools, shopping centers, and anything else that’s important to you.
Step 3: Submit a Mortgage Application
Once you’ve found the perfect home, it’s time to submit a formal mortgage application to your lender. The application will require you to verify all your personal and financial information, including details about the property you’re buying. Make sure to complete your application as accurately and completely as possible to avoid delays in the processing stage.
Step 4: Mortgage Processing
During this step, the lender will review your mortgage application and begin to process it. This step includes verifying your income, employment, financial history, and other personal information relevant to the loan. Additionally, the property may undergo an appraisal and/or inspection to ensure the value and condition of the house are up to expectations. Be prepared to provide additional documentation or information, if needed.
Step 5: Underwriting
The underwriting process involves reviewing all the information provided and making a decision on whether to approve the loan. This step may take several days or even weeks, depending on the complexity of your application and the risks associated with your credit profile. At Embrace, we do all our underwriting in-house and strive to complete this process as quickly as possible.
Step 6: Closing
Once your loan is approved, you’ll move to the closing process. At closing, you’ll meet with the seller, your REALTOR®, and a settlement agent to sign all the necessary paperwork and arrange payment of any closing costs, such as taxes and fees. You may also choose to have an attorney review the documents on your behalf. Be prepared to ask questions and be sure to clarify any doubts you have before signing the documents.
Step 7: Funding
The final step in the mortgage process is funding. After closing, the lender will transfer the funds to the seller, and you’ll receive the keys to your new home!
Buying a home is a significant investment, and understanding the mortgage process can make the experience less intimidating. At Embrace, finding the right mortgage for your unique situation is all we do.
Since 1983, we’ve been helping home buyers and homeowners get the financing they need to buy a new home, refinance an existing mortgage, and consolidate high-interest debt. Customer satisfaction is our highest priority (we continue to win awards), and we are always developing new loan products to fit the individual needs of our borrowers. When you work with us, you’ll discover why getting a mortgage is so much better when you Embrace it.
The mortgage process is complicated but can be broken into a number of steps: pre-approval, house shopping, mortgage application, loan processing, underwriting, and closing.
It’s a good idea to get pre-approval for a mortgage before you start looking for a property, so you know what you can afford.
Once you’ve found a property and put in an offer, expect the mortgage closing process to take up to 45 days to complete.
Check all of your paperwork carefully. You will be paying for your mortgage for a long time, so the small print can end up costing you a lot of money.