Getting a mortgage can be a daunting decision. There is a broad range of loan products and you’ll need to gather a lot of documents to apply for the loan that you choose. But, like anything that seems overwhelming, it is important to break down the mortgage process into bite size steps that can be focused on one at a time. Here are the five steps of the mortgage process at Hometown Lenders NW.
Step 1: Loan Application & Pre-Approval
The very first step of the mortgage process is submitting a loan application with your lender. In the application you’ll be asked to fill out simple information such as name, address, social security number, income, length of job history, and some legal declaration questions. At the end of the loan application step, you’ll be asked to submit some supporting documentation to prove that you are who you say you are, and you make as much as you say you make. The lender will then review your application and documentation and will issue you a pre-approval letter. With this letter you are ready to move on to step 2.
Step 2: House Hunting & Contract
Finding the right home for you can be the longest part of the entire mortgage process. With bidding wars, little inventory, and rising prices, it might take a while to find the right fit. Once you submit an offer on a property and all parties have signed the purchase and sale agreement (PSA), you are officially under contract!
Step 3: Complete Loan Processing
At this point in the mortgage process, your lender will go through your loan application and verify the information you’ve provided to them is still accurate. This may include ordering a verification of employment, verification of bank deposits, a property appraisal, and a title search. Once the lender receives all requested information, they will submit to underwriting.
Step 4: Underwriting
Underwriters are the key decision makers in the mortgage approval process and are the ones who give you the final approval for our mortgage. This step in the mortgage process might seem the most foreign to you as a borrower since you will likely not communicate directly with the underwriting team. Their final decision may be approved as it proposed, reject it, or approve with conditions. If the loan is approved with conditions, that simply means the lender will communicate with you what additional items need to be crossed off in order to get the final approval.
Step 5: Closing & Funding!
If your mortgage application is approved, it’s now time for closing! The closing team will provide official instructions and will send the loan documents to the title company. You will need to obtain a cashier’s check or wire transfer for any funds required at closing. The loan funds and monies are dispersed when all parties have signed, and acceptable documentation is returned to the closing team.
Closing Thoughts: When talking broadly about the home loan process, it can seem like there are a lot of steps and a lot of room for the process to hit bumps in the road. However, with our team at HomeTown Lenders NW, we are proactively looking out for your and your loan, ensuring we catch anything before it happens. With a tight grasp on the mortgage process, we hope you find the process not only simple, but also fun and exciting!