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Mortgage School » Home Loan Process

An Overview of the Loan Process

Step 1: Call or email us to get pre-approved for your home purchase

When we pre-qualify you, we help you determine how much of a monthly mortgage payment you can afford. We do this by considering your income and debts, your employment and residence situations, your available money on hand for down payment and required reserves etc. It's short and to the point, and we keep the paperwork to a minimum!

Once you qualify, we give you what's called a Pre-Qualification Letter, which says that we are partners are working with you to find the best loan to meet your needs and that we're confident you'll qualify for a loan for a certain amount.

When we show you a house you are interested in buying and you decide to make an offer, being pre-qualified for a mortgage helps you in two ways. First, it lets you know how much you can offer. We will help you decide on an appropriate offer, but being pre-qualified gives you the confidence to know you can follow through.

More importantly, to a home seller, your being pre-qualified makes you a hot commodity. They know from the outset that you have the financial muscle to buy their house. You have the clout of a buyer ready to make the deal right now!

You can always use the calculators available on our site to get an idea of how much mortgage you can afford -- but it's important to meet with us. For one thing, you'll need a Pre-Qualification Letter! For another thing, we will need to get some preliminary information so that we can start looking for your dream home!

Step 2: Tour homes with us and make a selection

Once you have your Pre-Qualification letter, the fun begins! Come by our office for a chat and we will discuss all the characteristics you are looking for in your new home. We will plot out drive times to work, look at the quality of the schools, analyze resale values in the neighborhood etc. We are committed in showing you the nicest homes in your price range and area, period! There is never any pressure or obligation on your part. We work for you, the buyer and are only concern is finding a home you will love.

Step 3: Shop loan programs and rates

To shop for a loan you will need to:

  1. Think about how long you plan to keep the loan. If you plan to sell the house in a few years you may want to consider an adjustable or balloon loan. On the other hand, if you plan to keep the house for a longer time, you may want to look at fixed loans.
  2. Understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. So for example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will get.
  3. Compare different programs. Shopping for a loan can be difficult. With so many programs to choose from, each of which has different rates, points and fees, it's hard to figure out which program is best for you. That's where an experienced loan officer can help you make a decision that's best for you.

Step 4: Obtain Loan Approval

Once your loan application has been received we will start the loan approval process immediately. This involves verifying your:

  1. Credit history
  2. Employment history
  3. Assets including your bank accounts, stocks, mutual fund and retirement accounts
  4. Property value

Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:

  • Fill out the loan application completely.
  • Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
  • Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
  • Do not move money into your bank accounts unless it can be traced. If you are receiving money from friends, family or other relatives, please contact us.
  • Do not go out of town around the closing date. If you do plan to be out of town when your loan is expected to close, you may sign a power of attorney, to authorize another individual to sign on your behalf.

Step 5: Close the Loan

After your loan is approved, you will be required to sign the final loan documents. This will normally take place in front of a notary public. Be prepared to:

  • Bring a cashiers check for your down payment and closing costs if required. Personal checks are normally not accepted.
  • Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.
  • Sign the loan documents.

Your loan will normally close shortly after you have signed the loan documents.

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