The mortgage process is long, but you can make it easier with some preparation. You’ll need to choose a lender, start the application and provide documentation to complete the loan closing.
Research lenders to determine if they offer mortgage terms and rates that fit your budget. Once you have a few lenders in mind, consider getting preapproval.
Getting pre-approved is a smart first step if you are considering buying a home. It lets you know how much lenders will lend based on your income, credit, and assets. Plus, it shows agents that you’re a serious buyer.
You’ll fill out a mortgage loan application and supply various documents to get pre-approved. These might include bank and investment account statements, pay stubs, tax documents (W-2 forms for the last two years), and employment history.
It’s important to note that each mortgage application requires a hard inquiry on your credit, which can temporarily lower your score. Many recommend only applying to one lender at a time to avoid having your credit dinged multiple times.
Find a Lender
A lender can provide you with the specific mortgage loan you seek, offering competitive rates to save money. You can find a lender through online research or by asking friends, family, and coworkers for recommendations.
Lenders in Mortgage Company Denver will review your financial profile, including income and employment history, credit score, debt-to-income ratio, and asset documentation, to determine if you are a good candidate for a mortgage. You must provide a copy of your most recent bank statements, pay stubs, tax returns, and proof of assets such as cash, savings, retirement accounts, and investment properties.
A robust credit score is essential to demonstrate your ability to repay a mortgage, and you should make all payments on time to improve your credit score. You may still be able to obtain a mortgage with a less-than-perfect credit profile but expect to pay higher interest rates.
Complete the Application
A formal mortgage application is required before you buy a home. It will require documentation of debts, assets, and income. Lenders may also want to review a property inspection report and appraisal.
You must be honest in your application and provide all requested documentation. Discrepancies in financial information can delay the mortgage process. More information could be needed to avoid the rejection of your loan.
Most lenders follow the Uniform Residential Loan Application or a similar standardized form. You can complete the application online or meet with a loan officer in their offices. Many lenders allow you to switch channels within 45 days without affecting your credit score. Be prepared to provide the lender with bank statements, investment account documentation, proof of employment, and your driver’s license or passport.
Make an Offer on a Home
When you find a property that meets your criteria, it’s time to start the mortgage process. This will involve submitting your complete loan application and providing the lender with supporting documents. This includes credit reports, title searches, and property tax transcripts.
Ensuring you have enough cash for the down payment, closing costs, and monthly mortgage payments is essential. If you need more clarification, consider getting preapproval before starting your search.
This will involve a hard credit inquiry and a more thorough vetting of your financial information, but it can help you compete in a competitive market. Once the loan application is complete, a mortgage processor will prepare the file for underwriting. Then, an appraiser will provide a professional estimate of the home’s value.
Close the Loan
Once your loan processor has verified all of the information in your application, they submit it to underwriting. During this stage, the lender will “nitpick” each documentation you’ve provided to ensure it meets their requirements. They commonly request additional documents or clarification on items (like a new month of bank statements). Responding to these requests promptly helps to move the file along.
If you meet all the conditions set forth by your lender, they will send you a Closing Disclosure to review. This document should look similar to the Loan Estimate you received earlier. Once you sign the paperwork, you’ll become a homeowner!