10 Loan Steps to Buying a Home
Purchasing a house 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 mortgage is one of the most important steps in the house purchasing process. A mortgage preapproval will let you know what you can afford. Also, a preapproval will give you an idea of your monthly home 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 Realtor
As a buyer, working with a Realtor is commonly a free service. Normally, the seller pays the Homebuyer’s Real Estate Agent a commission. Realtors also help buyers with the process of searching for a house and working on the client’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 buyer.
Step 3 – Contract Is Accepted, Property 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 Home Loan Type And Locks Rate
Once the house has been identified, the mortgage 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 loan. The buyer will also provide the documents to complete the home mortgage. The paperwork consists of income and asset documentation as well as any other needed documents the mortgage lender requires.
Step 5 – Once Client Information Is Verified, Lender Orders Title And Property Appraisal
Titles and appraisals are a critical step in the mortgage loan process. The appraisal will give the property a current market value while the title will check for current liens on the property. 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 Mortgage Loan Package Is Submitted To Underwriting For Approval
Once all the documentation for the loan is completed, the underwriter will review the file to make sure the home 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 loan is approved, the home loan lender will send the home loan 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 Home Mortgage 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 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 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 Officer who specializes in Dallas mortgage loans.