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Steps To Getting A Home Loan

December 28, 2020

A mortgage application form with house key. Steps to getting a home loan concepThe process of getting a mortgage loan can seem complicated, particularly for first-time homebuyers. Mixed in with the joy of finding the right home is the need to supply a lot of documentation and paperwork. However, borrowers will have the help of mortgage loan officers and real estate agents for all the steps to getting a home loan.

Steps That Go Into A Home Loan

Outlined below are the various steps involved in getting a home loan.

Pre-Qualification/Pre-Approval Phase

The first step in purchasing a home is the pre-qualification phase. This occurs as soon as a borrower has decided that they are ready to buy a home and entails a free analysis to determine whether they are in a position to buy a home. During this process, a bank or other type of lender makes an estimate of the maximum monthly mortgage payment that a borrower can afford and how much they can borrow.

Pre-qualification should not be confused with pre-approval. Although they both take place at the beginning of the home buying process and can give buyers an idea of how much they can spend, pre-qualification letters are not verified.

A pre-approval letter, in contrast, is vetted against the borrower’s bank statements and credit report and represents an actual offer rather than an estimate. For this reason, real estate agents generally prefer to see a pre-approval letter over a pre-qualification letter. Of course, a home buyer is not required to ultimately get a mortgage from the lender they used for the pre-approval; they are free to use a different lender if they find a better deal.

Getting an official pre-approval letter from a mortgage lender shows how much money a home buyer has been approved to borrow based on their savings, income and credit. It is important to secure this letter before making an offer on a house because it gives the seller solid evidence that a potential buyer is serious. Being pre-approved can also strengthen a borrower’s negotiating position when they make an offer.

The Application Process

Image depicting loan application process. Getting a home loan requires several stepsAfter visiting properties with a real estate agent and finding a home that meets their requirements, the next step for homebuyers is making an offer to buy the home. During this phase, a real estate agent negotiates and submits a contract for purchasing the property.

An earnest money deposit is often submitted along with the offer. This is a cash deposit that is made to secure a potential buyer’s offer and signal that they are serious. This might be as little as $500 or up to 5% of the purchase price, depending on the market and the competition

Once the buyer’s offer has been accepted, they are given an initial disclosure package and begin the official mortgage application process. At this time, they will likely be required to give their loan officer updated income and asset documentation, including bank statements and pay stubs. Completing these documents thoroughly and quickly can help keep the loan and home purchase on track.

Within a few days of submitting the official application, a borrower will receive a loan estimate listing the exact fees, rates and terms of the loan.

Processing The Request

During the processing phase, an appraisal and title work are ordered. When all of the documentation has been gathered, a processor reviews it for accuracy and completion.

This entails verifying information on the credit report, appraisal, title and other documents. Following a complete review, the processor then passes the full application package on to the underwriter.

Underwriting

When the loan reaches the underwriter, it is reviewed to ensure that it meets the guidelines for approval. The underwriter looks at the disclosures, asset documentation, appraisal, credit, employment and other documents to confirm that all of the guidelines and regulations are met. After passing this phase and clearing any of the contingencies that were placed on the loan, the underwriter clears the loan for final approval and sends it into closing.

Closing

Representational image for underwriting. Home loan typically takes place at a set date, time and locationClosing is the final stage of a home loan and it typically takes place at a set date, time and location. The buyer receives a closing disclosure at least three days before the closing that lists the terms of the loan, closing costs and the amount of money that must be brought to the closing.

Once all of the relevant documents have been signed, the funds are distributed and the ownership of the property in question is transferred from the current owner to the buyer. At this point, the house officially belongs to the new owner.

Work With The Home Loan Experts

If you are interested in purchasing a new home, let the home loan experts at My Lending Pal show you how our mortgage offerings can help you achieve your homeownership dreams.

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MyLendingPal, Inc, NMLS ID #1734346, (www.nmlsconsumeraccess.org); Corporate Office: 5400 Laurel Springs Parkway, Suite 304, Suwanee, GA 30024. Georgia Residential Mortgage Licensee #61544. Principal Loan Originator: Ricky Merchant, NMLS ID: 1517056. Georgia License # 54264. For questions regarding state licensing, please contact (404) 433-8918. Not all products and options are available in all states. Terms are subject to change without notice. Any rates or terms are speculative only and can change without notice.
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MyLendingPal, Inc
MyLendingPal, Inc
5.0
Balachandar Sundaresan
Balachandar Sundaresan
17:30 23 Jun 20
Roger Merchant and his team were very helpful, right from getting a great rate to completing all process on time and being super responsive. Would happily recommend him!!
Dinesh Nair
Dinesh Nair
14:41 30 Jan 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Ramesh Kumar
Ramesh Kumar
02:03 17 Dec 19
I would really recommend Nations First Home Mortgage, if you are looking for the best home mortgage options. I was very much glad to work with this team and they have saved lot of time and money!!
gulshan rai
gulshan rai
03:21 17 Apr 19
I would highly recommend Mr Roger to anyone in the area looking for an amazing lender. He made the mortgage process so easy and effortless. I could tell him and his team were very attentive to all the details that came with applying for a mortgage and were quick to remind me of any deadlines that were approaching.It was super easy to work with Mr Roger.My special thanks to preeti who did an amazing job to get things done in the timely manner. If I had any questions, it was almost like she was waiting at her desk for my phone call to answer the questions immediately. The loans closed on time and without a glitch. I would highly recommend them to anyone
Ajith Nair
Ajith Nair
01:50 13 May 19
We highly recommend Roger for financing mortgage. Roger and his team were excellent through out the process and we had a very smooth purchase. They were always available when we had any questions. It was an amazing experience working with Roger and his team.
Pratul Patwari
Pratul Patwari
13:03 20 Jul 20
Roger Merchant and Priti Vin helped us in buying our first home. They understood our needs and took care of everything for us. They were very good with the communication through the process. They will always be my first choice in future for the mortgage services.
Sujatha Hariharan
Sujatha Hariharan
20:51 26 Jul 20
They were able to find me great rates. Service was quick and communication prompt. The loan process can be daunting as is the document gathering process but this was the easiest and quickest that I have experienced. Highly recommend!
Dinesh Nair
Dinesh Nair
15:53 30 Jul 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Manu Pushpanath
Manu Pushpanath
15:59 29 Jul 20
Great lender to work with. Right from document collection till closing they did it in 2weeks. The fastest closing I heard and get to experience myself. One improvement I suggest is it will be good if the closing attorney can come into the house for completing the closing. Considering current situation it will add a lot of value to the reputation. Thanks Milan and team for a good closing experience.
Sakthi S
Sakthi S
20:46 01 Sep 20
Would definitely recommend Roger and his team.Refinanced for the second time and with roger, I didn’t feel like I refinanced.The process was very smooth and fast.The rates were very competitive and it was amazingworking with Roger and his team.I’d recommend him for sure.
Sunny Patel
Sunny Patel
21:17 01 Sep 20
They were quick, courteous, and professional. They got me an excellent rate and helped make the process smooth. I would recommend using to my friends and family!
Emmitt Rathore
Emmitt Rathore
14:57 22 Dec 20
Roger helped us find an unbeatable rate!His decades of work in the industry made it easy for us to complete many processes with the lender, and helped us close on time!I will definitely be passing the good word around and recommending family and friends to him.I look forward to our next real estate transaction with them.
M Alamoti
M Alamoti
01:02 11 Jan 21
I had the experience of using their service. They know what they are doing. They are very honest, professional and caring. I have no doubt and hesitation to recommend them to anyone who is looking to purchase a home. I am very pleased for their service.
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