Getting a home mortgage is a standard step of buying a house, but it is not a cut-and-dry process. It takes time and work, and you will need to comply with the lender's requests and requirements. Here are four vital things to know when you start working on the loan process for buying a home.
1. Getting Preapproved is Step One
Before you do anything else, you will need to work on getting preapproved for your loan. The preapproval process involves several steps and begins by obtaining an application from the lender. You will fill out the application and submit it to the lender when finished. They will ask you for some documentation to prove your earnings, job, and various other things. Once they tell you that you meet the requirements for a loan, you can continue with the process.
2. Finding a House Is the Next Step
The next step is finding a home. You cannot get a mortgage until you pick out a house. The lender will need to know what house you picked and all the details of the purchase. At that point, the lender will issue further instructions for you and the seller. You will have to complete any steps they ask for, and the appraisal is the main one.
3. Getting the Appraisal Comes Next
The appraisal tells you how much the home is worth in today's market. This amount is essential for you to know as the buyer, but it is also important to the lender. The appraisal amount reveals the risk level the lender takes by issuing you the loan. It also tells the lender how much money to offer you for the loan. Additionally, the down payment percentage you must make comes from the appraisal amount.
4. Waiting for the Lender Is the Final Step
You will have some other steps to complete after getting the appraisal, and your lender will have work to do to finalize the paperwork for the mortgage. You can expect this process to take a few weeks. Once the lender completes it and gets the final approval for your loan, you can close on it and take possession of your new house.
These are four vital things to know about the home mortgage process. If you want to start working on it, talk to a lender to learn more about the preapproval process for getting a home mortgage.