There are many actions to consider when applying for a mortgage. From the program and preapproval process, to acceptance, financing, and finally the closing of this loan, it is a long and intense procedure. The more organized and ready you are for this particular procedure, the easier it will be.
Pick a trustworthy loan advisor or mortgage agent that will assist you get through the loan procedure. Don’t hesitate to comparison shop. This is one of the significant purchases of your life, and you’ll wish to be certain you are getting the best possible thing. Explore all of your options as each type of lender offers different loan products. Collect information from banks, mortgage brokers, credit unions and government loan programs.
Order a copy of your credit report or have your own loan adviser get it for you. Review the report and make certain that there are no errors. If you find some, have your loan adviser help you mend them. Also check with your loan advisor to see if there are steps you can take to boost your score.
Complete a loan application. The loan program will need your personal information as well as advice about your income, assets and debts.
Collect your supporting documents. The loan adviser will let you know exactly what documents your lender requires, but generally he’ll request a credit report, bank statements, pay stubs and references from the landlord as well as employers.
Review your good faith estimate, an itemized list of the costs you will encounter through the financing procedure. The law requires your lender to give you a good faith estimate within three days of your submitting the loan program. In this manner there are no hidden fees, and you and the creditor can be certain that you have enough funds to close the loan. You may incur penalties for loan origination, appraisal, credit report, underwriting and processing.
Submit your purchase arrangement to lock in the rate of interest on the loan. Some lenders will allow you to lock the interest rate before you have the purchase contract, for a limited period and for a commission. The lender will also need an appraisal on the property, and some will need a termite inspection. The time period after your offer to purchase a house has been accepted is known as the escrow period. It is during this period that you will be fully approved by the bank as a debtor.