mortgage loan process

Instantly Learn The Mortgage Loan Process In 5 Easy Steps

The process of getting a home loan can seem overwhelming, but at Global Realty & Finance, we make the mortgage process easy from start to finish. Let’s begin by taking a look at the basics of the mortgage loan process.

What will happen during your mortgage loan process?

During the mortgage pre-approval process, you’ll prepare and provide basic financial information. Then, you’ll make an offer, finalize the deal, and close on your home.

How long does the home loan approval process take?

Depending on your level of preparation, the mortgage approval process may take an hour, or it might take multiple days to make agreements and sign paperwork.

Mortgage process steps made simple

Here are the steps you’ll need to take to make the loan approval process simple and carefree:

1. Choose your lender

First on our list for getting approved on a home loan is picking the right lender. You should only work with lenders you can trust, and you want to make sure you can get a good rate and that you won’t be saddled with unnecessary fees. Check the information available online about our firm. We know you’ll find that Global Realty & Finance is considered as one of the most prestigious and reliable brokerage lending firms.

2. Complete the home loan pre-approval process

Before your real estate agent will take you around to look at homes, you’ll need to pass a pre-approval process. Your lender will use a few basic parameters to determine your overall creditworthiness, which is a gauge of how likely you are to pay back your debt.

To make it through pre-approval, you’ll need to show that your debt-to-income ratio isn’t worrisome, your credit score is reasonably high, and property taxes and home insurance won’t make your home purchase inviable. Remember to be honest with your lender; you want to make sure you can pay your loan back as well. Since they’re experienced professionals, home lenders might have better insight into your future ability to repay the loan and not default on payments.

3. Come to an agreement

Take your time looking at houses, and once you’ve found a home that fits the bill, make an offer. Your offer can be whatever you want it to be, but remember that you’ll need to keep it reasonable to stand a chance of getting approved.

Research the selling prices of similar homes in the area, and try to keep your offer within the ballpark of the lender’s asking price. Lean on your real estate agent to make the negotiation process easier, and once everything has been arranged to your liking, go ahead and sign a purchase contract.

This legal agreement serves as proof that you and your lender came to an agreement and that the final sale of the home is scheduled to go through on a given date. Make sure your lender gets a copy of your purchase contract as soon as possible.

4. Finalize the home loan process

You’ve made it almost all the way through the mortgage loan process, and all that’s left is the underwriting. This process is similar to an audit by the IRS, and it involves your lender taking a thorough look at your finances to make absolutely sure that you’ll be able to pay for your home. 

Remember that the underwriting process covers a lot more than just approval or rejection of your offer. This part of the home loan process will also determine how much you can borrow and what your interest rate will be.

This step can require a lot more documentation if you’re self-employed or if there are other complicated factors regarding how you derive income. Here are some of the items the underwriting process might include:

  • Proof of income
  • Proof of employment
  • Pay stubs or check deposits
  • Long-term debt disclosure
  • Tax returns for up to the last 2-3 years
  • Proof that you have homeowner’s insurance

It’s the underwriter’s job to make sure that offering loan is profitable for the finance provider, so you may be asked to provide additional information. The source of your down payment, for instance, may be requested, and you may also be required to demonstrate that you have a certain amount of cash reserves.

You’ll provide your own assessment, but your lender will appraise the property as well to make sure that you’re getting a good deal. The lower the price you get for a high-value home, the sooner the bank can cash in on its investment. It will also be necessary to demonstrate that you are purchasing the property free and clear by providing the title.

5. Complete the home loan closing process

Closing on a home is both a traditional ceremony and an important business meeting. This event usually involves all the parties involved in the transfer of the property, but the closing process may involve a series of separate meetings.

You will provide the down payment during the closing process, and this payment must be provided in a way that the lender and seller can easily verify. It will also be necessary to pay any closing costs at this time.

A lot of work goes into the transfer of home ownership, and each person who worked on the project must receive their share. Here are some examples of fees that you might see included as closing costs:

  • Lender fees: The lender takes these fees for its services.
  • Application fees: This is the cost of applying for the loan.
  • Property appraisal fees: The lender asks that you pay for the cost of appraising your new home.
  • Closing attorney fee: An attorney must be present to oversee the signing of the closing documents.
  • Tax, insurance, and interest pre-payments: Known as “escrow deposits” these payments are used to cover the expected costs of home insurance, taxes, and interest on your mortgage.
  • Other fees: The property may need to be surveyed, credit reports may need to be run, and any manner of other miscellaneous fees may be applied.
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