Buying a home for the first time is mind-boggling, confusing, and overwhelming. There are a lot of considerations to think of when you want to ensure your property is the best. Owning your dream house is the main reason why you have to prepare yourself for understanding the mortgage process and the approval steps ahead of time.
To ensure that you have enough knowledge about the mortgage loan process, take a look at the steps that are covered below from the pre-approval of your mortgage loan process to finally closing it.
The Pre-Approval
The Pre-Approval is the step where a lender has to check and review your financial capability and credit score. Always bear in mind that before you shop for anything in the real estate market, you have to make sure that you apply for a loan and get approved by a mortgage lender. If you’re buying in Canada, you should check the current cibc mortgage rates before heading to a lender.
In this way, you can paint a picture in your mind of how much you are going to spend so as not to go out of your price range. Technically, if you meet the lender’s criteria, a letter will be sent to you showing that you’re ready to shop for properties and showing every agent that you are a serious buyer.
Property Hunting and Agreement
If you’re done with the pre-approval process of how much you are going to spend for a house that you want to acquire, the next step you should look into is your search for the available properties within your identified price range.
With that said, you can look for available properties that are for sale in some listings. If you’re a first time home buyer we highly recommend that you look for real estate agents to help you with your house hunting.
Once you find a prospect, your real estate agents will assist you with an offer together with the terms that need to be approved by you and the seller. When you both agree with the terms and conditions, then you both sign the purchase agreement.
Loan Application for Mortgage
It is your first step of becoming approved for your house loan so you can finance your property. In this situation, you need to work hand in hand with your mortgage provider to fill up the form for a mortgage loan application.
The mortgage application form consists of several sections which you need to fill out including your personal information, your financial status, and your mortgage details. Sometimes, the application form can be confusing so you should work with the lender closely.
Loan Processing
This process includes loan officer marketing ideas. It means that your lender had to gather all the necessary documents relating to your application. They have to review your application and critically verify your assets, income, and employment as well as credit reports.
Underwriting
It is the most crucial part of the mortgage loan process because it determines if your application is approved or not. Underwriting is a process where your lender had to check if you reach the minimum requirements for them to accept your loan.
A tip for all mortgage loan applicants is to have a good credit score and not giving a hint of quitting your job. It is the only way that your lender can tell that you have a financial capacity of paying your mortgage.
Loan Approval and Closing
If you have successfully met all the requirements and underwriters had approved your loan, you will undergo a commitment which includes your loan program, amount, term, and interest along with conditions and complete disclosures.
Additionally, if everything is good to go, you and your lender will both sign some pertinent documents. After everything is complete, then you’ll successfully receive the keys which are the end of your mortgage application process and is now then approved.
Takeaway
The home buying process is difficult whether you’re a pro at it or not. The process will need critical study and massive research. Applying and being approved when getting a mortgage loan is vital; thus, you have to be very dedicated and sincere with regards to your credit score and financial capability.
When all of these conditions are met, expect to live a comfortable and happy life in your hard earned dream house.
