8 Steps To the Home Loan ProcessPosted at 09,Sep 11:44 pm Blog Buyers Featured
Get A Home Loan: The 8 Step Loan Process
- As soon as you decide that you want to buy a home; start saving your pennies. The more money you have saved up the better and more smoothly the process will go. Lenders are much more willing to approve your request if you have a substantial down payment and aren’t borrowing from a relative. Also, the more money you put down, the lower your monthly premium is and thus the more home you can afford.
- Clear up any questionable marks on your credit report. Don’t give the lenders any reason to second guess giving you a loan. This is sometimes impossible and don’t get discouraged if you have a few dings here and there. Just be prepared to talk about these with the lender and explain what happened. To get a copy of your credit report you may go to the reporting agencies and request one free copy per year from each of the three agencies which are Equifax, Experian, and Trans Union.
- Gather your financial documents like tax returns, bank statements, pay stubs and your most recent W2. Being prepared with these documents makes the process that much quicker and it tells the lender you are not only serious, you’re organized and prepared for the responsibility of owning a home and making your mortgage payments on time.
- Utilize handly tools like the mortgage calculator which can tell you how much home you can afford. By entering the price of a home you can calculate monthly payment over specified term at a specified interest rate. These are great for keeping you within your budget when looking at homes.
- Do your homework and speak to the lender about the different home loan options and which one you may qualify for. There are programs suited for different types of people such as first time home buyers, veterans etc. Some loans have arms, (adjustable rate mortgage) and it’s important for you to at least be familiar with the terminology when speaking to your lender. They will review all of your options with you and it’s important to ask any and all questions you have.
- Get pre-qualified before you begin shopping around. Most Real Estate Agents will require you to be pre-qualified before they begin working for you and for good reason. Further, if you found a home you really wanted, you want to be prepared to make an offer. If you’re not you stand to lose the opportunity of getting it. Think about it this way. You will have to do these same steps anyway when it comes time to apply for the loan right. So do them now and have a lot less to worry about later.
- Respond to your lenders request for information as promptly as possible once you’ve applied for the loan. Any latency could cause you to lose the home you’ve chosen by scaring off the sellers who can only assume there are problems with your loan approval. You not only lose your down payment you stand to lose your dream home. Don’t be discouraged if your lender asks you for more information than what was originally requested, this is common and can be a good sign.
- While you are waiting for the approval during the closing period it is important that your credit status remain exactly the same. Do Not Make Any Large Purchases Or Apply For Any Lines of Credit. This could be the death of your entire approval and thus getting the home you want.