It is everyone’s dream to own a mortgage at some point in life. However, those who already own one or several mortgages will tell you that this is not a walk in the park. In fact, most of the times you will need to acquire a mortgage loan in order to have a realistic chance of ever owning one. However, do you know how to apply for mortgage loans? Do you know what it you require when applying for this loan? Here we seek to answer all those questions and much more.
What are the steps for applying for a mortgage loan?
Like any other type of loan application, there is a process to follow in order to get your mortgage loan. Below are the steps:
The pre-approval stage:
This is the first stage in when applying for this type of loan. Unlike in the past where banks and other lenders used to lend money to everyone, nowadays you have to have a good credit score in order to secure a mortgage loan. This is what happens during this stage. The lender will pull out your three-bureau report and look at your credit history before considering you for a loan. After this, the lender will also have a clear knowledge of how much they can lend to you.
After the lender has the satisfaction that your credit scores amount to the required standards, it is time for you to go shopping for your dream mortgage. You can achieve this in several ways. For instance, you can go online and look for the one that you can afford now that you know the amount of mortgage loan that you will get. After you find the house, you will have to pay an earnest money to show that you are a serious buyer. Thereafter, you will sign a purchase agreement.
Applying for the mortgage loan:
When applying for this loan, you will have to produce several documents and provide details such as those of your current employer/ business, your income, other debts that you may have, property information, financial blemishes if any and the type of mortgage that you want to acquire.
The processing of your mortgage loan:
Here, the loan processors will look at all the documents presented to them both by the borrower and the property owner. Some of the details considered at this stage include the order credit report, verification of the VOE and VOD, inspection of the order property and search for the title order.
Underwriting of the mortgage loan:
The underwriter is the key decision maker here. After reviewing all the details of the mortgage loan, the underwriter can choose to approve or reject the loan application. The underwriter also double-checks the documents for accuracy reasons.
Mortgage closing process:
This is the last stage. After a three day review period, there is a closing meeting where the relevant parties sign the necessary documents. At this stage, any party willing to back out of the deal will do so at the Right of Rescission stage.
Mortgage loan application has a process probably longer than most loan applications. The loan process goes through all the above process. Necessary documents are presented and the relevant parties sign where they should for the deal to be complete.