Many people fear all the issues involved in getting a mortgage. But with you will get to know the step by step process on how to go about acquiring a mortgage. According to companies offering origination services, here are the procedures on how to get a mortgage:
Get your credit in check
Origination services experts advise that before you set off to get a mortgage, you need to make sure you are financially prepared for homeownership. Also, know that lenders keep a close look at your credit score when determining your eligibility for a mortgage loan. If your credit score is below the required marketing, do anything to improve it such as lowering outstanding debt, disputing any errors and holding off on applying for any other credit cards. The moment you are sure you have a good score; you are ready to research and choose the best mortgage.
Get pre-approved for a mortgage
Once you have checked your credit, getting pre-approved for a mortgage is inevitable. If you stick to the same lender once you are ready to apply for a loan, the process will go a little quicker since you have started the ball rolling with paperwork and a credit check.
Choose the right mortgage
Government-backed loans can make it easier for you to buy a home if your credit score isn’t great or if don’t have money for a big down payment. Fixed rate mortgages are safer because the mortgage interest rate won’t change over the life of the loan.
Under the interest rates
When a mortgage takes a longer-term, the interest rate will be more compared to the one which takes a shorter term. You should know your annual percentage rate. This is likely going to be higher than the quoted interest rate because it includes origination fees. Most importantly, you should not borrow more than what you can handle.
Find the right lender
The way you want to get a home that best suits your needs, the same way you will need to find a lender that best suits you. If you checked around before getting pre-approved, you are already one step ahead.
Submit your application
If you are using the same lender that pre-approved you, you will have to submit your most recent financial information. If you are self-employed, you will have to provide extra proof of your financial stability.
Begin the underwriter process
This part can be very hectic even if you have been pre-approved. It’s more like waiting to be approved for a loan. During this process, the factors considered include credit and job history, debt to income ratio and current debt obligations.
Prepare for the closing process
At this point, your loan has been approved. But before the process is complete, there are few things to do: decide if you should get discount points, purchase homeowners insurance, buy lenders title policy, do a final walk-through of the home to make sure nothing has changed and the agreed-upon repairs have been made, receive a closing disclosure (normally three days before the scheduled closing date) which lists all the closing costs then finally get a cashier’s check which will be from your bank to cover closing costs.
Close on the home
Many origination services state that you will have to pay between 2% & 5% of the home’s purchase price in closing costs. If your down payment is less than 20% of the home’s purchase price, you will have to pay for private mortgage insurance.