Understanding The 10 Mortgage Loan Steps To Buying A House
Purchasing a house 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 preapproved for a mortgage is one of the most crucial steps in the house purchasing process. A mortgage loan preapproval will let you know how much you qualify for. Also, a prequalification will give you an idea of your monthly home payment and will also give you the peace of mind of knowing that you are able to qualify for the purchase of a new property.
Step 2 "" Buyer Makes Purchase Offer On Property With Assistance From Realtor
As a buyer, working with a Real Estate Agent is usually a free service. Normally, the seller pays the Buyer"s Agent a commission. Real Estate Agents also help homebuyers with the process of searching for a home and working on the homebuyer"s behalf in the negotiating of the sales price. The Real Estate Agent will also help the buyer is negotiating the terms of the sales contract. Realtors also provide information about the community and neighborhoods. Their service is very important to the homebuyer.
Step 3 "" Contract Is Accepted, Home Is Placed In Escrow
For many states, once the contract is agreed upon, the house is placed in escrow. For states like Texas, the earnest deposit and contract is dropped off at a Title Company.
Step 4 "" Buyer Submits More Detailed Mortgage Application, Selects Home Mortgage Loan Type And Locks Rate
Once the property has been identified, the mortgage company can now assist the buyer with choosing a home loan 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 loan. The documents consists of income and asset documentation as well as any other needed documents the home loan lender requires.
Step 5 "" Once Homebuyer Information Is Verified, Lender Orders Title And Property Appraisal
Appraisals and titles are a vital step in the loan process. The appraisal will give the home a current market value while the title will check for current liens on the home. In order to close on the property, the title company will make sure that all liens are paid so the transfer from seller to buyer is smooth.
Step 6 "" Mortgage Loan 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 loan qualifies. The underwriter will verify all documentation 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 Loan Contract
Once the loan is approved, the mortgage lender will send the mortgage 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 Loan Documents
This is the exciting time for a home buyer. The buyer will go to the title company office and sign papers.
Step 9 "" Home Loan Is Funded And Recorded
Once all parties have signed the documents, the mortgage loan is funded. The title 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 loan is funded, the buyer is now the owner of the home. The buyer can now move into their new home!
David White is a Sr. Dallas Mortgage Loan Officer who specializes in Dallas mortgage loans.
by: David White
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