subject: Break Down Of Mortgage Application Process In 5 Parts [print this page] Buying a home is a very complicated processBuying a home is a very complicated process. When you apply for home loan, you realize that the mortgage loan application process is very lengthy and complex. The entire mortgage application process can be broken into 5 parts. Here are the 5 different parts of the entire process. This will help you understand the process better.
Zeroing in on a lender
Before targeting any lender, you should have perfect idea about your credit position, income, asset and debts. Then you need to contact several lenders and take their mortgage offers. Analyzing your financial situation and requirements, lenders will offer you loan programs. From several lenders, you have to choose the best one and get pre-qualified and pre-approved for a home loan. Here it is to be noted that you should ask mortgage questions to the lenders that come to your mind. This will help you zeroing on a particular lender.
Filling in the application form
The next thing that comes in the mortgage application form is the filling in of the application form. You have to provide a whole lot of information related to your identity, income, assets, debts, financial history, type of mortgage loan etc. Committing mistakes in filling in the application form may dash your chance of getting approved for the loan.
Providing necessary documents
Information that you have given in the mortgage application form is verified by the mortgage lender. You have to provide documents supporting the information that you have provided in the mortgage application form. Documents that you have to produce include identity card issued by a government authority, bank account statements, income tax returns, pay stubs and other documents as asked by the lender. Given the huge importance of all these documents, you need to keep all these documents ready with you. In case you fail to produce documents on time, your mortgage application may get rejected.
Passing through underwriting scrutiny
Once you fill in the mortgage application and submit all the documents as asked by the lender, your case goes to the mortgage underwriter. A mortgage underwriter judges the credit worthiness of a borrower. He/she assesses your credit history, income, employment status and assets to find out whether or not you are worthy of obtaining the mortgage loan. Based on the assessment, the underwriter gives green or red signal to the lender. An underwriter may offer you suggestions to augment your loan approval chance. He/she may sometimes ask you to arrange funds for making more down payments or to repay your outstanding car loan. The mortgage underwriting process usually takes around 2 months. To get approved for the mortgage loan, you have to pass through the mortgage underwriting process. At this point of time, it is wise to lock in the mortgage rate of interest.
Getting the final loan approval and the loan
If you pass through all the above mentioned process, then you receive the final mortgage loan approval from the lender. Mortgage contract is signed between you and the lender with terms and conditions attached to it. After all these, you can move into your home and start making monthly mortgage payments till the expiry of the loan term.
By making timely and regular mortgage payments, you pay off the entire mortgage loan upon the expiry of the mortgage term. Thereafter, you become the obligation free owner of your dream home.
