How to Apply for a Mortgage Loan
Preparing to buy a home can be stressful and overwhelming. There are several steps you must take between the time you decide you’re ready to buy and the time you get the keys to your new home. One of the major steps in buying a home is securing the best mortgage loan for your budget. We want to ensure that you’re as prepared as possible before this next step in life. Keep these steps in mind as you prepare to apply for a mortgage loan:
Before You Apply
Before you dive into the mountains of paperwork that come along with a mortgage loan, you want to make sure you have some other things in order. Making sure your credit score is where you want it to be before applying is important. Often, the higher your credit score, the better terms and interest rate you will qualify for on your loan. It’s important to also have an idea of what type of mortgage loan you want to apply for whether it’s a VA loan, FHA loan, or even a First Time Home Buyer loan if you’re purchasing your first home. It’s important to find the best loan that will fit your budget. Once you know what type of loan you’re interested in, start getting preapproved. Many mortgage companies offer free tools to find out how much you can get preapproved for without impacting your credit. Once you have these items in order, you should be ready to start applying for your mortgage loan.
Filling Out Your Application
Once you’ve researched several lenders and have gotten your preapprovals for potential mortgage loans, you can begin filling out your applications. Applying to multiple lenders will give you options to choose from so you can make sure you’re getting the best terms possible. Just be aware that they will need to pull your credit to give you your final offer, but your score shouldn’t suffer as long as they are all submitted within a 45-day window. Applications normally consist of five pages of questions regarding finances, debts, assets, employment, the loan and the property you’re interested in. After you have the application filled out, you can submit it to the lenders and wait for your offers
Reviewing Your Loan Estimates
Now that you have several loan offers to compare, it’s time to choose the best lender for your mortgage. Compare the lenders’ rates and fees to make sure you are getting the best deal. Choose a lender that not only offers the best mortgage loan, but they also respond promptly to your questions or concerns, and are trustworthy. Now that you’ve chosen your lender, contact them and be ready to proceed with the mortgage loan process.
Loan Processing
Unfortunately, buying a new home doesn’t happen overnight. Mortgage loan processing is the longest step in the home buying process. This step can take anywhere between 2 and 3 weeks to complete. At this point, every statement that was made on your mortgage application goes under the microscope. You should expect to have to answer a multitude of questions and provide supportive documentation if necessary.
Underwriting
The underwriter’s job is to judge the risk of lending money to you on the home you have chosen to buy. They evaluate things such as your loan-to-value ratio, whether you have enough cash flow to make your monthly mortgage payments, and whether or not you’ve made previous payments on time.
Closing Your Loan and Getting Your Home
Once the lender gets the all clear signal from the underwriter, they will notify you that your loan is cleared to close. Within three business days of your scheduled closing date, your lender will send you the Closing Disclosure, which is a federally required form showing the detailed and final costs of your mortgage loan. Once you sign the final paperwork and provide the realtor company with your closing funds from your lender, you’ll get your keys. Home sweet home!
If you’re ready to apply for a mortgage loan, let our team help you get the loan you need. Visit our Mortgage Loan Center to learn more about the mortgage process, use our Home Buying Calculators to get a picture of what your home loan will look like, and check out our Buying a Home video series on YouTube for more information about home buying. Apply for a mortgage loan online or set up an appointment to speak with one of our Mortgage Loan Officers.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.