Home Buying Tips: Understand Mortgage Loan Process from First Contact to Recording
Understanding how mortgage loan process is important when buying a house with loan. Once you offer being accepted by seller, time is an essence in every check point in the buying process. Every contingency must be fulfilled by the certain time as stated inside the purchase contract. If you missed the mark, you may lose your earnest money! Here are some basic understand mortgage loan process when buying a home in Arizona.
Step 1: Prequalification & Application
Look at your budget
Ask yourself what you can comfortably afford while still meeting your financial obligations and goals.
Meet with your lender
Work with your lender to get a prequalification letter that you can share with your real estate professional when you start shopping for a home.
Submit your application
Submit the application fee and supporting documentation to get the ball rolling.
Build up your credit well in advance of applying for a mortgage. Lenders like to see no delinquencies within the last two years.
Step 2: Conditional Approval
1. Provide documentation
You’ll have to confirm your employment status, income level, assets, debt info and other information to be conditionally approved.
2. Check your inbox
Watch for a conditional approval letter to ensure that your mortgage amount and savings will cover the purchase price and closing costs. Also, clear any conditions you must meet for approval.
3. Look at the price tag
Check with your lender to make sure the appraised value of the house you want to buy is equal to or greater than the asking price. The bank will not loan you more than the house is worth.
Don’t make any major purchases or open new lines of credit for a few months before and during the application process.
Step 3: Final Approval
1. Set realistic expectations
Because of the level of detail involved, it takes time for the underwriter to examine all the necessary documentation before approving your application.
2. Stay connected
Be prepared to get a few phone calls from your lender, as more info might be needed.
3. Check your inbox
Keep an eye out for your final approval letter—you’re approved! Review your closing disclosure document thoroughly for accuracy to avoid surprises during closing.
Acquiring new debt in the months prior to or during the application process could result in your loan being delayed or canceled.
Step 4: Closing
1. Sign your documents
Sign all your final loan documents.
2. Transfer down payment
It’s time to provide certified funds for any remaining down payment balance or closing costs.
3. Pat yourself on the back
Congratulations, you did it—you’re officially a homeowner!
The time it takes to close can vary. Have a clear conversation with your lender to set realistic expectations for a comfortable closing date.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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