One of the first steps you should take prior to beginning your home buying process involves preparing for a mortgage. It’s helpful to know how long it can take, what to expect, and how long each step might take is important especially in a very competitive market as we are seeing today! The mortgage loan process can take anywhere from 3 to 6 weeks after you have been prequalified and identified your home. Therefore, knowing how to get your financial ducks in a row is helpful before diving into your home search.
Step 1: Prequalification
During this phase, you should reach out to a loan officer to complete a prequalification which includes a review of credit, income documentation, and asset documentation. During this process you will determine which sales price and monthly payment you qualify for. The lender may also identify any red flags prior to going under contract with your dream home.
Step 2: Find your Dream Home
We’ll identify your wish list, areas of interest and we’ll work with you to find the right fit for you.
Step 3: Sign Your Contract
Once you find your dream home, you’ll submit an offer to the seller and place a deposit on your home (this is the Earnest Money Deposit).
Step 4: Loan Application and Processing
You will review and sign your loan disclosures, provide updated information if necessary, and if needed, any supporting documentation. Once the application is submitted, the loan processor will review all documentation for the loan to go into underwriting.
Step 5: Underwriting
The underwriting process is when the application will be examined and the loan underwriter will make a final underwriting decision. Once there is no additional information needed, you’ll be cleared to close!
Step 6: Closing
This is when you’ll meet in-person with a title company to sign all the final paperwork, complete the down payment, and receive the keys to your new home!
Some obstacles to avoid
There are a few things you may want to avoid as you get prequalified and prepare to place and offer:
Making large purchases (cars, boats, other expensive items).
Credit changes or checks - Don’t open or close any lines of credit
Delinquencies - pay your bills on time!
Banking changes - large deposits, changing accounts, etc…
Having an experienced agent on your side as you undergo this exciting and large purchase is so important for success. Your agent will share their knowledge and experience to guide you through the process and connect you with highly qualified and trusted loan officers. These contacts will help answer any questions you may have along the way. Reach out today and let’s discuss your home buying goals and get started with the home search!