Understanding The 10 Loan Steps To Buying A House
Purchasing a home is exciting, but can also be stressful when you don't know what to expect
. Here are the 10 loan steps to buying a home so you're prepared:
Step 1 - Lender Pre-Qualifies A Homebuyer For A Certain Loan Amount
Getting prequalified for a mortgage is one of the most important steps in the house purchasing process. A home mortgage preapproval will let you know what you can afford. Also, a preapproval will give you an idea of your monthly house payment and will also give you the peace of mind of knowing that you are able to qualify for the purchase of a new house.
Step 2 - Buyer Makes Purchase Offer On House With Assistance From Realtor
As a homebuyer, working with a Real Estate Agent is usually a free service. Normally, the seller pays the Buyer's Real Estate Agent a commission. Real Estate Agents also help homebuyers with the process of looking for a property and working on the homebuyer's behalf in the negotiating of the sales price. The Realtor will also help the buyer is negotiating the terms of the sales contract. Real Estate Agents also provide information about the community and neighborhoods. Their service is very important to the homebuyer.
Step 3 - Contract Is Accepted, Property Is Placed In Escrow
For many states, once the contract is accepted, the property is placed in escrow. For states like Texas, the earnest deposit and contract is dropped off at a Escrow Office.
Step 4 - Buyer Submits More Detailed Home Loan Application, Selects Home Mortgage Type And Locks Rate
Once the property has been identified, the mortgage company can now assist the buyer with choosing a mortgage program like first time home buyer loans. The buyer can lock the rate of the home mortgage loan. The buyer will also provide the paperwork to complete the mortgage. The paperwork consists of income and asset documentation as well as any other needed documents the home loan lender requires.
Step 5 - Once Applicant Information Is Verified, Lender Orders Title And Property Appraisal
Appraisals and titles are an important step in the home mortgage process. The appraisal will give the house a current market value while the title will check for current liens on the home. In order to close on the home, the title company will make sure that all liens are paid so the transfer from seller to buyer is smooth.
Step 6 - Home Mortgage Package Is Submitted To Underwriting For Approval
Once all the documentation for the home mortgage loan is completed, the underwriter will examine the file to make sure the home mortgage qualifies. The underwriter will verify all paperwork from income and asset documents as well as title and appraisal. Once final approval is given, the loan can close.
Step 7 - Escrow Office Prepares To Transfer Assets, Per Home Mortgage Contract
Once the loan is approved, the home loan lender will send the mortgage loan documents to the escrow company, who will prepare a HUD-1 settlement statement. The title company will then collect funds from all parties and place funds in an escrow account.
Step 8 - Participating Parties Sign Home Mortgage Loan Documents
This is the exciting time for a home buyer. The buyer will go to the escrow company office and sign papers.
Step 9 - Home Loan Is Funded And Recorded
Once all parties have signed the paperwork, the home mortgage is funded. The escrow company will then send the transfer paperwork and mortgage deed to be recorded. The funds will be disbursed based on the information on the HUD-1 Settlement Page.
Step 10 - Seller Moves Out, Buyer Moves In On Agreed Date
Once the home mortgage is funded, the buyer is now the owner of the home. The buyer can now move into their new home!
by: David G White
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