The process of getting a new home can be one that sounds like a lot of work, but as long as you have a general idea of what you’re doing things will be much easier. Buying a new home often requires going through the loan process first, and that tends to be the part that a lot of people avoid thinking about. Applying for a loan is rather stressful because you may not exactly know what amount you are going to get. Here are the steps to help you go through the motions of applying for your home loan.
1. The first step in the home loan process is to start your research early on. Use the Internet to find out any information you may need, and check out magazines and books to learn more about the essential information that you will need. It can help to subscribe to websites for realtors to be informed on what some tips out there might be, and to learn more about the current process.
2. The next step is to start to fill out your formal application. You will have to complete a mortgage application during this process with the professionals and discuss what kind of down payment can be made, as well as submit all the required information and documentation necessary to get a loan. This will entail the clarification of what rates will be associated with you and what closing costs will be included, as well as any extra bonuses such as a first-time buyer’s credit along with a “good faith estimate” (GFE) and a Truth-In-Lending (TIL) statement.
3. At this time, the lender in which you are applying will review all of the information presented to them, and they will decide whether or not you are going to be accepted for the loan in question. This is also when the potential lender will put together a package for the loan underwriter to see if all qualifications are met and if anything needs revision or not. If something is missing or not completed to the level that the lender needs, there is a high probability that you will be asked to give it another look over.
4. In the case of a conventional loan, mortgage insurance will be necessary to move forward in order to protect both you and the lender. Typically, this is only required if the down payment for the loan is less than 20% of the amount that you wish to borrow. It truly won’t matter who you decided to ask for the loan, there will always be something like this that will be needed in order to establish a little bit of protection for all parties involved.
5. After you get through this process, it will be time to see if all of the contingencies have been met. There will be a new date to establish the closing day for when the loan is scheduled to take effect.
6. The final step is the transaction for the loan in order to get the title of the house that you are about to purchase. The payment is usually completed through money order, check, or a wire transfer within the next couple of weekdays. If you do not see the funds coming in right away or haven’t heard anything, be sure to take a moment to relax as it is bound to show up within the time frame that it was promised to you. However, once you have that confirmation, you will be able to proceed with the loan.