Steps to Getting Your Mortgage
A simple guide to helping you get your mortgage!
Getting a mortgage may appear daunting at first glance, but a clear breakdown of the steps can greatly simplify the process. The following lays out the steps that a borrower should take as they look to purchase a home and acquire a mortgage to help finance the purchase!
Step One: The Down Payment
The very first step in the road to acquiring your mortgage is to save up enough for the down payment.
This first step enables you to better judge the kinds of homes you can purchase, as well as assessing the kinds of loans you can acquire or need.
A 20 percent down payment is the norm, though it is by no means the requirement. A down payment of 20 percent also eliminates the need for a private mortgage insurance (PMI).
The Federal Housing Administration (FHA) only requires a 3.5 percent down payment for borrowers with credit scores of 580 or higher.
Getting the down payment part of the equation out of the way will help you gain a better idea of what you can afford. It is a big factor and a major starting point on your way to getting your mortgage.
Other factors in addition to the initial down payment, such as credit scores, income and job situation, also determine the affordability of your investment.
Step Two: Pre-Approval
A mortgage pre-approval is like a pre-screening, it tells you a lot of crucial information you will need on your way to acquiring your mortguage and purchasing your piece of the American dream.
A mortgage pre-approval meeting with a lender should happen before you start shopping around for a home. After the meeting, you’ll have a much better idea of what you can afford and narrow your home search accordingly.
During a pre-approval meeting with a lender, your financial situation is reviewed to determine whether you are a good candidate for a loan.
The lender will determine and disclose the amount they’re willing to lend and provide a pre-approval letter.
Step Three: House Hunting
Once you’ve saved up sufficient funds for a down payment and have met with mortgage professionals for a pre-approval, you can move on to the fun bit and begin shopping for a house.
This step in the process doesn’t typically involve the lender and is primarily carried out by you, the buyer, and your real estate agent.
Lenders become involved again only after an offer to buy a property has been made.
Step Four: Applying for a Mortgage
Once the seller as accepted your offer, the mortgage approval process can begin.
Most lenders use the same standardized form. Here on mortgages.us, we make the process even simpler! To access a straightforward and easy-to-use mortgage application form, just visit our application page!
The application form will asks for information about the property being purchased, the type of loan being used, and information about you, the borrower.
Step Five: Get Your Documents in Order
Lastly, have all your documents ready for the mortgage process. These documents include identification, bank statements, tax records, employment letters, purchase agreements and credit reports.
Once all the documents have been submitted to the loan processor, they will be verified and evaluated. Your income, assets and employment situation will be assessed and a home appraisal will be ordered to determined the value of the property.