Buying a home is no easy task, but being informed and having the right professionals helping you will make all the difference in your experience. I pride myself on educating all my clients on the entire process and what they need to do to make it happen. If you are unfamiliar as far as what to do to get the ball rolling on obtaining a mortgage, here are a few simple steps to make it happen:
DETERMINE YOUR AFFORDABILITY
Before you even start working with a Realtor or house hunting, you want to determine exactly what you can afford. This will greatly help you and your agent find and target what your options are. This is a big purchase, and you want to make sure that you will get a payment that you can comfortably afford, along with your normal household expenses. You can figure this out by using an affordability calculator and also a payment calculator to determine your buying power.
GET STARTED ON THE MORTGAGE PROCESS
The next step will be actually speaking with a lender/loan officer. I suggest speaking with a mortgage company rather than an individual bank. Companies have more flexibility and resources for different situations, as they work with more banks. You will need the following to get the process started in working with a lender/loan officer.
Personal Info– Name, DOB, Marital Status
Residence History– Rent payment or all mortgage, insurance and tax figures for at least the past two years.
Employment and income– Documentation showing wages and employment history for at least two years. If you receive commissions or bonuses, you’ll need two years of figures. Lenders average variable and self-employed income over two years. Full tax returns for two years are usually required.
Asset Balances– All checking, savings, and investment accounts. Your lender will need to see a paper trail of your funds
Debt Payments and balances- Credit cards, mortgages, student loans, car payments, and installment loans
Social Security Number– For a credit report to confirm your debt and scores
SELECT DOWN PAYMENT AND LOAN TYPE
Once your lender has your full profile, they can recommend what loan works better for you. It’s important to match your loan terms and home buying choices with your objectives. Because lenders require your full financial profile, they are in a good position to help you explore and fine-tune your objectives to make sure you select the loan type that fits you best.
START WORKING WITH AGENT
At this point you actually begin the home shopping process. Your agent and lender should be communicating to make sure they’re on the same page. This will make life easier for all parties involved.
WRITE THE OFFER, LOCK YOUR RATE, FINALIZE THE LOAN
Once you find the fit that you’re looking for, its time for you and your agent to write the offer and get it under contract. Your lender will inform you that it’s time to lock your rate. A rate lock runs with a borrower and a property, so you can’t lock your rate until a seller has accepted your offer.
Your lender will then request any updated documentation needed from you, order an appraisal on the property and review the property title report.
Once all of these items check out, your lender will draw final loan documents with your desired rate and terms for you to sign. Your lender will fund the loan, and the home will be yours!
This is the basic process for obtaining a mortgage/home loan. If you have any further question on this process or want to get it started, contact me today.