WHAT TO KNOW BEFORE STARTING THE PROCESS OF BUYING A HOME


If you’re beginning to think about buying your first home, congratulations! We know it’s a big step but all homeowners were first timers once and they can all tell you they might have been a little anxious yet in reality the process was much simpler than first imagined. Today, mortgage loan approvals are essentially streamlined. Here’s how the loan approval process works and what you can expect your lender to ask for.

When first applying, you’re getting your preapproval letter. This is a letter prepared by your lender that states you have been preapproved by the lender and all you need to do is find a home and the lender takes it from there. To get a preapproval, your lender will ask for your most recent paycheck stubs, your two most recent W2 forms or your two most recent federal income tax returns if you’re self-employed. You’ll also be asked for copies of your most recent statements from the accounts you’ll be using for a down payment and closing costs.

Once you submit your application and initial paperwork, your lender will also pull a credit report along with credit scores. Lenders don’t require perfect credit, but they do ask for a responsible payment history. If you don’t regularly check your credit report on your own, you should start doing so. Mistakes can often show up on credit reports. Lenders also upload an electronic version of your loan application to an automated underwriting system which will quickly provide a conditional approval. Lenders follow this conditional approval when your loan is evaluated.

The lender then orders various third party services such as an appraisal, orders a title report and contacts the escrow agent. The lender’s documentation process probably takes around 10 days or so, depending upon market volume and sales in the area. Once the file is completely documented, it heads to the underwriting department. The underwriter compares what is included in the loan package with the items listed on the conditional approval. Once completed, the loan is electronically sent to the escrow agent, waiting for you signature.

During the course of underwriting, the underwriter may ask for additional information from you or others for clarification. Most often, the underwriter needs an updated pay check stub as all credit documents need to be less than 30 days old. While your loan is being processed, it will get a little quite on your end. Don’t think your loan isn’t being worked on during this “down” period. It is. There are lots of moving parts and it’s your lenders job to make it all look easy.

For more information or questions about mortgage loans,
Please visit Majestic Home Loan

Or Call  (855) 757-8748

Popular posts from this blog

August 8 - 3 Tips you Must Know Before Buying a Vacation Home

August 7 - How and Why Lenders Accommodate Bad Credit Home Buyers

August 2 - 3 Ways to Restructure Your Mortgage and Save Thousands