Florida Mortgage News

Steps Of The Home Loan Process

October 19th, 2018 1:03 PM by Gerald Bliss

Purchasing a home will be one of the biggest transaction of your life. It is a complex process that can also be stressful, but working with the right professional will help make it a smooth and potentially stress free process. Knowing the steps ahead of time will help you achieve this goal. I've broken down the home buying process into seven steps.

 

1. Pre-Approval - Getting ready for home ownership starts with the Pre-Approval process. You will fill out a mortgage loan application and the Mortgage Loan Originator will collect information about your income, assets, liabilities and credit history. This is where you will learn about types of loans, estimated cash to close (down payment, closing costs, prepaid taxes, insurance, and escrows), and your estimated mortgage payment. Upon receipt of documentation supporting what you’ve told the Mortgage Loan Originator, a written Pre-Approval Letter is issued and you can begin shopping for a home.

2. Home Shopping - Work with your Real Estate Agent to find the right home for you and your family. Look at your budget and be mindful of the taxes, insurance, and HOA fees. Contact your lender if you have any questions about your numbers. Make an offer when you've found the right house.

3. Loan Disclosures - When you and the seller have signed a sales contract and any required addendums, the lender can now begin the loan process. The loan package and initial loan disclosures will be sent to you to review, sign, and return as soon as possible.

4. Loan Processing - The mortgage loan processor will collect documents from you, order title documents, the appraisal, and will communicate with all parties during the transaction. This person will work with you and all parties to get your loan ready to close. Your initial and supporting documentation will now be submitted to the lender for review and approval.

5. Underwriting - The Underwriter will review your credit, income, assets, and liabilities to ensure your loan scenario meets all guidelines. After successful initial underwriting, your loan should be "Approved With Conditions."

6. Clearing Conditions – Your processor will now work with you to clear the lender’s conditions. These conditions may include an appraisal, verification of employment, verification of funds to close, insurance policy, survey and any other supporting documentation as needed. When all conditions are cleared, you are "Clear to Close!" Try not to make major changes in your career, assets, or monthly obligations prior to closing because that can affect the approval of your loan.

7. Closing Day - Closing time! When your loan is "Clear to Close," the lender and your Real Estate agent will schedule your closing day with the title company. You will receive your closing disclosure 3 days prior so you know how much funds to wire to the title company. As a security precaution, verify the wiring instructions with the Title Company prior to wiring funds. Bring two forms of ID and prepare to celebrate!

Of course there are things you should do after closing, like knowing who to send the monthly payment to, applying for Homestead if this is your primary residence, setting up electricity, water, utilities, waste pickup, and anything else you may need for your home, but this should also be a time to look back on your accomplishments and be proud that you are a home owner.

This is a basic guide so there may be more or less pertaining to your specific home loan. If you have any questions or would like more information on purchasing a home, please call 813-966-1888 or email gerald@blissmortgage.com and we’ll be glad to have a conversation with you.

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