The mortgage application process is an important step to getting a house that you and your family have been aspiring to get. Whether it is your first time or not, it’s always recommended that you either know the basics or take the time to refresh your memory. This way, you don’t prolong it by missing any steps and needing to backtrack. For your guidance, feel free to use this article as your guide.
What Are the Things to Prepare Before I Apply for Any Mortgage Loan?
Before you fill out any application forms, accomplish the following tasks first:
- Ensure you have a strong credit score and have a discrepancy-free credit report ready.
- Do your research on various local mortgage lenders and compare their offers.
- Find your ideal home.
- Prepare all the necessary loan paperwork.
What Are the Steps of the Mortgage Loan Process?
Step #1: Fill out the mortgage application form
At this point, since you already have ideal lenders in mind and some pre-approvals ready for your mortgage, you should finalize who you hope to borrow money from as you make an offer on an ideal home. You should begin by contacting 3-4 lenders; whether that is done through the phone or online is up to them. If you want to have an idea of what the typical mortgage application form looks like, it must be like this Uniform Residential Loan Application format.
From the lender’s side, they will ask permission to pull your credit, and you should expect a loan estimate document at least three business days after they receive your application. The estimate should detail the loan amount, type, and all mortgage costs.
Step #2: Review the loan estimates and commit to a mortgage lender
Now that you have your estimates in your hands, you have the liberty to go through them, compare costs, and ask questions if you have any. If you feel overwhelmed by the math and fine details, the good news is you can simply refer to the Comparisons section, which you can often find on page three. In particular, look for the total cost in five years, annual percentage rate, percent paid in interest, and principal paid in five years.
Once you have a prospective lender you would like to commit to, you can go ahead and contact them, saying you want to apply for a mortgage. Remember, even if the rates seem too good to be true from an ideal lender, that’s not the only thing you are after. What you want to look into is their credibility and trustworthiness through your interactions with them.
Step# 3: Loan processing starts, followed by the underwriting
Once you commit to a lender, all the information you provided in your application will be validated and scrutinized when necessary. Therefore, be prepared to answer for all of them and have your appropriate paperwork ready. You should always stay in touch with the lender. Ignoring their queries will only lengthen the process.
At this point, an underwriter will determine the loaning risks that the lender may incur when they hand the money to you for a certain property. All you need to do is wait for a call saying, “Congratulations! You’re cleared to close!”
Step #4: Claiming the closing disclosure and your loan
Once you get the call, your lender will hand you a closing disclosure three business days before the scheduled closing date. It’s your responsibility to ensure all the details in the disclosure line up with the estimate. If there are any changes, request explanations from your lender. Once you’re all set, sign it, and you have your loan!
Conclusion
Going through the mortgage application process can be challenging, especially when you are bombarded by a surge of information and financial pressures. Fortunately, you now know the steps you need to take, have the chance to organize your thoughts, and trust the procedure. Just remember all the crucial details mentioned above and look for a lender that looks after your wellbeing as an applicant.
Are you looking for the best local mortgage lenders in Sacramento to help you move forward in your house buying process? Consult with us at Hawkins Home Loans. We are your dedicated team of mortgage professionals with decades of experience and established relationships, giving you the opportunity to enjoy incredibly low rates. Schedule an appointment today!
