10 Loan Steps to Buying a Property
Buying a home is exciting, but can also be very 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 home mortgage is one of the most important steps in the house purchasing process. A home mortgage 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 house.
Step 2 – Homebuyer Makes Purchase Offer On Property With Assistance From Real Estate Agent
As a homebuyer, working with a Real Estate Agent is commonly a free service. Normally, the seller pays the Buyer’s Realtor a commission. Real Estate Agents also help homebuyers with the process of looking for a property and working on the homebuyer’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 very important to the client.
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 Home Loan Application, Selects Mortgage Type And Locks Rate
Once the house has been identified, the loan company can now assist the buyer with choosing a mortgage loan program like first time home buyer loans. The buyer can lock the rate of the mortgage. The buyer will also provide the documents to complete the home loan. The paperwork consists of income and asset documentation as well as any other needed documents the mortgage lender requires.
Step 5 – Once Homebuyer Information Is Verified, Lender Orders Title And Property Appraisal
Appraisals and titles are a vital step in the home mortgage 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 house, the title company will make sure that all liens are paid so the transfer from seller to buyer is smooth.
Step 6 – Home Loan Package Is Submitted To Underwriting For Approval
Once all the documentation for the home loan is completed, the underwriter will examine the file to make sure the loan qualifies. The underwriter will verify all paperwork 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 Loan Contract
Once the mortgage is approved, the lender will send the home mortgage documents to the title 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 Mortgage Loan Documents
This is the exciting time for a home buyer. The buyer will go to the escrow company office and sign papers.
Step 9 – Home Mortgage Loan Is Funded And Recorded
Once all parties have signed the documents, the mortgage loan is funded. The escrow 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 mortgage 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.