The mortgage application process can be overwhelming for some. While looking for a new home is exciting, it’s easy to lose sight of the steps you need to take to keep your mortgage application on track. Here’s what you need to know once you’ve accepted an offer.
Submit Your Application
The mortgage application process starts once you have identified the house you want to purchase and a lender with whom to work. At this point, your lender will require you to complete a full application and provide documentation about your income, debts, and assets.
Schedule a Home Inspection
Make an appointment for a home inspection as soon as possible. Doing this will give you enough time before your closing date to run negotiations with the seller if the inspection turns up any unanticipated problems.
Be Available to Your Lender
You will receive conditional approval if you apply and qualify for a mortgage. Your lender may request additional documentation. Respond as soon as possible to ensure that your application progresses smoothly.
Get Homeowners Insurance
Lenders need to see proof of insurance before they can officially approve the loan. Homeowners insurance covers the loss or destruction of your home and its contents. In the event that someone is hurt on your property, it may also offer financial protection.
Allow the Process to Play Out
Understand what’s happening behind the scenes: Your lender will order an appraisal of the home to ensure the home’s value matches the purchase price. The appraiser will inspect the property and compare it to recently sold homes in the same price range. They will also order a title search to ensure there are no outstanding liens on the property.
Avoid Incurring New Debt
Avoid getting new credit cards or making other major financial purchases while your loan is being processed. New loans or other changes to your debt-to-income ratio may prevent your mortgage from being approved.
Fix Your Rate
Lock in your interest rate with your lender. Rates must be decided and agreed upon ten days before the closing date.
Look Over Your Papers
Once your loan is approved and the inspection, appraisal, and title search are finished, your lender will set a closing date and inform you of the amount you’ll need to bring.
Set up A Payment Plan for Your Down Payment and Closing Costs
You’ll need to obtain a cashier’s check or arrange for wire transfers to pay for closing costs and down payment.
Close to Your New Home
Read all the paperwork you get before the closing and clear any questions you may have about the conditions of the contract. Once you’ve completed all the necessary paperwork, you can unlock the door and enjoy your brand-new home.
