For some people, the road to buying their dream house involves years of saving and preparation. Others, however, opt to get the help of a mortgage lender to finance their new home in the shortest period of time. Applying for a mortgage, in fact, is beneficial to both the would-be homeowner, who gets to purchase a house immediately, and the lender, who benefits in the form of income from interest rates.
But in order to fully maximize the benefits of a mortgage loan, a borrower must have at least a working knowledge of the matter. It’s a complex process that must be entered into with care. Here’s a step-by-step guide to applying for a mortgage loan.
Do your research
There are several institutions, banks, or mortgage lenders in your Salt Lake City locale that offer loan services. But any borrower must be careful in picking a lender to work with. That’s because offers differ in terms, interest rates, policies, etc. Finding a trusted lender and an arrangement that will fit your capabilities is crucial, considering that this is a long-term commitment.
Do your research first on the available options. Learn about the policies and terms of the loan to get a better understanding of what you’re getting yourself into. Find a loan option that’s beneficial and applicable to you and your financial capacity.
Fill out your application
After you’ve chosen a suitable lender and loan terms for you, you can begin filling out your application. This process usually takes up to an hour and would require you to know a lot of information regarding your current financial health and status. It’s typically a five-page form that includes questions about your finances, debts, employment, assets, and property. So be sure to know these beforehand for a seamless application process.
Review the loan estimates
Lenders, whether institutions or banks, are required to provide their potential borrowers with loan estimates. This will lay down all the numbers and amounts in detail, so you get a better idea of how much you’re going to shell out to meet the stipulations of the loan.
You want to take some time to really study your loan estimates. Crunch the numbers, if necessary, to help you identify any inquiries or clarifications you might have. Remember that you don’t have to commit to a particular lender if the loan estimates are not favorable to you, after all. It’s still a good time for you to look for other options.
All loan applications go through a processing period. This is where the lender will take a closer look at the information you provided and determine whether or not they will accept you as a borrower. At this point, brace yourself for clarifications and additional document requests. This process usually takes two-three weeks before completion.
If your loan application gets approved, that means that the lender has deemed you capable of paying back their investment according to the terms agreed upon. Getting approved is definitely exciting. But before going ahead with buying a house, check the closing disclosure first. Read through it and make sure that it’s in line with the loan estimate. If any fees or numbers have changed, ask the lender for clarification.
Getting approved for a loan is a sure-fire way to be able to buy your dream house quickly. But before you can get that sweet approval, you have to go through a complex process first. Let this guide familiarize you with the basics of mortgage loans and you’ll be well on your way to successfully financing your dream home.