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 loan is one of the most important steps in the house purchasing process. A mortgage loan preapproval will let you know how much you qualify for. 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 home.
Step 2 – Homebuyer Makes Purchase Offer On Home With Assistance From Real Estate Agent
As a buyer, working with a Realtor is normally a free service. Normally, the seller pays the Buyer’s Realtor a commission. Real Estate Agents also help buyers with the process of searching for a property and working on the buyer’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 extremely important to the homebuyer.
Step 3 – Contract Is Accepted, Home Is Placed In Escrow
For many states, once the contract is agreed upon, the property 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 Home Mortgage Loan Application, Selects Home Mortgage Loan Type And Locks Rate
Once the house has been identified, the lender can now assist the buyer with choosing a home mortgage program like first time home buyer loans. The buyer can lock the rate of the mortgage. 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 mortgage company requires.
Step 5 – Once Client Information Is Verified, Lender Orders Title And Property Appraisal
Appraisals and titles are an important step in the home mortgage loan process. The appraisal will give the home a current market value while the title will check for current liens on the property. 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 – Home Mortgage Loan Package Is Submitted To Underwriting For Approval
Once all the documentation for the loan is completed, the underwriter will examine the file to make sure the 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 home loan can close.
Step 7 – Escrow Office Prepares To Transfer Assets, Per Home Loan Contract
Once the loan is approved, the lender will send the mortgage documents to the escrow company, who will prepare a HUD-1 settlement statement. The escrow 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 – Mortgage 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 home 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 Advisor who specializes in Dallas mortgage loans.
