Purchasing a home is exciting, but can also be stressful when you don’t know what to expect. Here are the 10 loan steps to buying a home so you’re prepared:
Step 1 – Lender Pre-Qualifies A Homebuyer For A Certain Loan Amount
Getting preapproved for a mortgage loan is one of the most important steps in the house purchasing process. A mortgage loan preapproval will let you know how much you qualify for. Also, a preapproval will give you an idea of your monthly house payment and will also give you the peace of mind of knowing that you are able to qualify for the purchase of a new home.
Step 2 – Homebuyer Makes Purchase Offer On Home With Assistance From Realtor
As a homebuyer, working with a Real Estate Agent is commonly a free service. Normally, the seller pays the Homebuyer’s Agent a commission. Realtors also help homebuyers with the process of looking for a property and working on the homebuyer’s behalf in the negotiating of the sales price. The Real Estate Agent will also help the buyer is negotiating the terms of the sales contract. Realtors also provide information about the community and neighborhoods. Their service is very important to the buyer.
Step 3 – Contract Is Accepted, Property Is Placed In Escrow
For many states, once the contract is agreed upon, the property is placed in escrow. For states like Texas, the earnest deposit and contract is dropped off at a Title Company.
Step 4 – Buyer Submits More Detailed Home LoanApplication, Selects Home Loan Type And Locks Rate
Once the house has been identified, the mortgage lender can now assist the buyer with choosing a home mortgage program like first time home buyerloans. The buyer can lock the rate of the mortgage loan. The buyer will also provide the documents to complete the home mortgage loan. The paperwork consists of income and asset documentation as well as any other needed documents the home loan lender requires.
Step 5 – Once Client Information Is Verified, Lender Orders Title And Property Appraisal
Titles and appraisals are a vital step in the home mortgage process. The appraisal will give the house a current market value while the title will check for current liens on the house. In order to close on the home, the title company will make sure that all liens are paid so the transfer from seller to buyer is smooth.
Step 6 – Mortgage Package Is Submitted To Underwriting For Approval
Once all the documentation for the home loan is completed, the underwriter will examine the file to make sure the mortgage qualifies. The underwriter will verify all documentation from income and asset documents as well as title and appraisal. Once final approval is given, the home mortgage loan can close.
Step 7 – Escrow Office Prepares To Transfer Assets, Per Mortgage Contract
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Step 8 – Participating Parties Sign Mortgage Loan Documents
This is the exciting time for a home buyer. The buyer will go to the title company office and sign papers.
Step 9 – Home Mortgage Loan Is Funded And Recorded
Once all parties have signed the paperwork, the home loan is funded. The title company will then send the transfer paperwork and mortgage deed to be recorded. The funds will be disbursed based on the information on the HUD-1 Settlement Page.
Step 10 – Seller Moves Out, Buyer Moves In On Agreed Date
Once the mortgage loan is funded, the buyer is now the owner of the home. The buyer can now move into their new home!