Buying a home is one of the biggest financial decisions you’ll ever make. But navigating the mortgage process can feel overwhelming without the right guidance. That’s where we come in! This guide will help walk you through each step, from pre-approval to closing, so you can approach your home-buying journey with confidence and clarity.

Step 1: Pre-Approval

The mortgage process starts with getting pre-approved. During this step, we’ll evaluate your financial situation, including your income, credit score, asset profile. A pre-approval letter not only gives you a clear idea of how much you can borrow but also shows sellers that you’re a serious buyer.

Tips for Pre-Approval:

• Gather documents like pay stubs, tax returns, and bank statements.
• Check your credit report for errors and address them beforehand.
• Avoid making major financial changes.
• Be conscious about credit. Does a household item or vehicle need to be financed and if so, how does it impact what you might be comfortable paying towards your new home?

Step 2: House Hunting and Making an Offer

With a pre-approval in hand, you can start shopping for your dream home. Work with a real estate agent to find properties within your budget and desired location. Once you find the perfect home, submit an offer.

Key Considerations:

• Factor in property taxes, insurance, and HOA fees when setting your budget.
• Include contingencies, like a home inspection, in your offer to protect yourself. These contingencies will give you an ability to cancel the purchase should something arise that no longer makes this your dream home.

Step 3: Loan Application

After your offer is accepted, it’s time to formally apply for a mortgage. Although you might have already submitted an application and provided certain documents, we may need additional documentation about your finances. The quicker these are received, the quicker we can work towards full approval!

Step 4: Loan Processing

During this stage, we’ll verify your financial details, order an appraisal of the home, and gather any additional information needed to assess your loan application. The appraisal ensures the property’s value supports the loan amount.

Tips to Streamline Loan Processing:

• Ideally, respond within 24 hours to ensure the process is moving forward without hiccups.
• Let us know if you plan on traveling or being away for any real length of time so we can set proper expectations on the closing timeline.
• Avoid large financial transactions or changes to your employment. If you need to make a big purchase or change jobs, we understand life happens! Letting us know early allows us the time to communicate with all parties to the transaction on timing.
  • Things like large financial transactions, or changes to employment just before, or during the process, will require additional documentation to better understand compensation to give credit for and potential debts. 

Step 5: Underwriting

Underwriting is a third party that reviews your loan application in detail to assess any risk to the transaction. It is a lot of money to be lent out and they’re going to perform fact checking to ensure the risk to them is minimal. They’ll evaluate your credit history, income stability, and the home’s value. While this step can be nerve-wracking, we’ll communicate each step of the way to hopefully ease any worry! 

Step 6: Loan Approval

Once underwriting is complete, you’ll receive final approval for your mortgage! This is a really exciting stage and means we can work towards drawing up the loan documents! You’ll often hear the term “clear to close,” and that is this step! Underwriting has given the go-ahead to close! 

Step 7: Closing

Closing is the final step in the mortgage process. A closing department will work to draw up the loan documents. We’ll ask the title company to provide you with a copy, securely, to review beforehand. We’ll go through those together to answer any questions you might have. At the closing table, you’ll sign the necessary documents, pay closing costs. After signed, the title company will record the official deed and you’re ready to take ownership of your new home.

Closing Day Checklist:

• Bring a government-issued ID, or two!
• You’ll be signing your name per your legal name so be prepared for that!
  • For example, if your name is Cameron, but you go by Cam, you’ll be signing Cameron if that is what is on your ID.
  • If you elect to hold title with a middle initial, you’ll likely need to include that in your signing, too.
• Ensure your wire has gone out and been received by the title company or have a certified or cashier’s check for any required funds.
  • If you’re signing your loan documents in the morning, it might make sense to send the wire out the day before. When sending your wire, always have the banker call the title company to verify the wiring instructions prior to sending it out. The title company will provide a copy of their wiring information. Provide this to the banker helping you.
• Review all documents carefully before signing! If something isn’t what you’re expecting it to be, don’t sign it! Please call us so we can work on fixing it. It can be an inconvenience to wait for new loan documents but on the rare occasion a document is incorrect, we want to ensure it’s corrected prior to closing.

Final Thoughts

While the mortgage process has many moving parts, staying informed and prepared can make it a smooth experience. With this step-by-step guide, you’re now equipped to navigate the path to homeownership with confidence. If you have questions or need expert guidance, don’t hesitate to reach out to your lender or mortgage professional.