8 Steps to Closing a Mortgage Loan
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Buying Your Home
8 BASIC STEPS TO CLOSING THE LOAN
Before You Start
As you proceed with the loan process, and before you let the myriad of options confuse you, remember to keep the following two thoughts in mind:
- How much more can I afford to pay monthly for housing than I pay now?
- Factors to consider in this are: Taxes, mortgage installment, mortgage insurance if there is not a substantial down payment available, and sometimes, homeowners’ association dues.
- How long do I expect to live in the home?
- If your work requires moving every two years or if you are staying in a neighborhood until your child graduates are a few of the many reasons people may not plan to stay in a home for the length of the loan term.
- Get qualified-the 4 c’s of obtaining credit
- Capacity (can you afford it) Bring proof of income (W-2s, paystubs,tax returns)
- Credit (If your credit is not established, try bringing alternative payment histories)
- Collateral(once you choose a home, an appraisal will ascertain whether the value supports the purchase loan.)
- Character(How long have you been established? Do you have a stable work history? Residency?)
- Choose a Home to purchase
- Make an offer based on the amount you are qualified for and feel you can afford.
- Apply for a Mortgage (prequalified means it appears you may be approved. A mortgage application would be reviewed by an underwriter along with supporting documentation before final approval would be offered.)
- Home is Appraised by professional chosen by loan underwriting firm.
- Chain of Title is ordered to verify the seller has right to sell property to you.
- Receive a copy of the Settlement Sheet showing your final closing costs in writing. This gives you the opportunity to review and call for any corrections, if needed….and to make sure your funds are ready to bring to closing.
- Close the loan and receive keys to your new home!!