Are you buying your first home? While it’s an exciting time in your life, the mortgage process can be intimidating. The following are the steps and what you can expect:
Step 1: Select a broker
Once your offer on a home has been accepted, you can either apply for a retail loan where you will do most of the work yourself, or hire a mortgage broker who will help you obtain a mortgage. If you are unfamiliar with the mortgage process, contacting a mortgage broker can make everything simpler and less stressful.
Step 2: Lock in your interest rate
Once you have selected the mortgage broker you want to work with, you will then fill out your mortgage application and lock in your interest rate. The standard is to lock your rate in for 30 days, but it depends on when your closing date is in relation to today’s date. Keep in mind that the longer you lock your rate in for, the more expensive it is.
Step 3: Prep the paperwork
After your interest rate is locked in, you will then submit your income documents (pay stubs, W2’s, tax return), the hazard insurance policy (beginning on the date of closing), the signed purchase agreement including any counter offers, all pages of your bank statements showing the funds for your down payment, a complete and signed Verification of Rent form, the earnest money deposit cancelled check, and signed disclosures. Your mortgage broker will also run your credit report, order an appraisal, and obtain the title agreement for your new home. Keep in mind that the documents that are required may vary depending on the mortgage company.
Step 4: Underwriting
Once these documents are submitted to the mortgage company, your loan will go into underwriting. Within the underwriting process you will find out if you have been approved or denied. You will also be notified of any missing information and if any clarification is required.
Step 5: Close!
After all documentation has been received by the mortgage company and your loan has been approved, the next step is for it to go to closing. At closing you will sign the final closing documents with an attorney, and you are also required to bring funds to cover the down payment and closing costs (which can be found on the final HUD-1 form that you will have received). After signing the paper work, the loan will go to funding and soon you will be a proud owner of a new home.
Are you ready to buy a home?
At Financial Symmetry, our financial planning process helps us evaluate your mortgage options based on your financial goals to help pick the best fit. Contact us today if you are interested in starting a new plan.
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