In most cases, this is the initial step in the mortgage process.
Starting your mortgage application here will give you a better sense of your mortgage program and loan amount ahead of time.
You will be asked to provide your lender with an overall picture of your creditworthiness.
PURCHASE
Buying a home is a major investment. Before you start looking for a home and comparing mortgage rates, consider your current circumstances and how they might change in the future. Since buying a home is likely one of the largest investments you’ll ever make, ensure your financial situation is in order first.
To understand how much money you’re making and spending each month, start by analyzing your bank accounts and billing records.
We’ll guide you step-by-step through the purchasing process.
- Get Pre-Approved for a Mortgage
- Complete a Mortgage Loan Application
- Getting Your Pre-Qualification
- Reviewing the Loan Estimate
- Hire a REALTOR®
- Find a Home
- Negotiating and Having an Offer Accepted
- Closing on Your Home Purchase!
You’ll begin by filling out a loan application.
A mortgage loan application requires you to provide your financial information to a lender, who will use this information to evaluate the amount you may borrow.
If you prefer to complete your loan application in person, you can meet with your lender.
Your lender will first check your income and request a copy of your credit record.
If your application is accepted, your lender will issue a Pre-Qualification Letter. This letter indicates that you meet the minimum FICO credit criteria and the lending requirements for approval.
A Pre-Qualification letter indicates that you fulfill the minimum FICO credit criterion as well as the lending requirements for approval.
Give your Realtor® a copy of the Pre-Qualification Letter as soon as you receive it. This helps them determine how much you can afford to spend on a property.
A Pre-Qualification Letter will help you narrow down your house search and persuade sellers to consider your offer more seriously.
WWhat are the six pieces of information that your lender requires to process a comprehensive loan application?
• Name
• Income
• Social Security Number (to obtain a credit report)
• Property address
• An estimate of the property value
• Amount of the Mortgage Loan
If you have any questions, ask your loan officer for assistance in completing your mortgage loan application.
Remember, your loan officer is always ready to help and will gladly answer any queries you may have. They will also review your application to ensure that all the information is accurate and valid. Once reviewed, your application will be processed for approval.
The Loan Estimate is a form that your lender must provide you; it is required by law for your protection.
Within three business days after submitting a complete mortgage loan application, your lender will give you a Loan Estimate. This document includes key details about your loan, such as the estimated interest rate, monthly payment amount, and total closing costs.
Check out the CFPB's Loan Estimate Explainer to learn more about the Loan Estimate Form and understand key terminology.
Remember that the Loan Estimate is just that: an estimate.
At closing, you will receive a Closing Disclosure, which will detail the exact charges you will be responsible for.
As a homebuyer, you are not required to use the services of a real estate agent to complete the transaction.
However, we always advise all potential purchasers to do their homework and engage a trustworthy Realtor® to represent their best interests. A buyer's agent is a real estate professional who has a fiduciary obligation to act on your behalf and in your best interests throughout the buying process.
A Realtor® can also provide information on houses and communities that isn't readily available online. Best of all, it's completely free!
If you need help finding a reputable Realtor® to represent you, you can always contact your lender for a list of qualified agents.
Setting up a Multiple Listings Service (MLS) search with your Realtor® is the simplest way to discover your new property.
• It can be set up to run automatically and send emails up to 5 times each day.
• Allows you to communicate directly with your agent about each property.
• Within the MLS, you can use search filters to narrow down results by locations, zip codes, cities, subdivisions, streets, school districts, and more.
• Provides all the information you need to buy a house in one convenient location.
One of the biggest advantages of using MLS to find a property is that it always includes the most recent listings and market changes.
Keep in mind that if you search on Zillow or Redfin, the property you’re looking at might be outdated and no longer available.
Now that you've been to a few open houses and found properties you like, you’re ready to make an offer.
Negotiating and getting an offer approved may take some time.
Your broker will draft a purchase contract with the terms of the offer once you’ve negotiated a price and the seller approves it. If the sellers accept your offer, they will sign and return the contract.
If the seller agrees to include any fixtures or appliances with the sale, ensure they are mentioned in the purchase contract. Don’t assume anything will be left behind if it isn’t specified in the contract.
Appraisal Contingency
When your offer is approved, your lender will arrange an appraisal from a third-party appraisal business, and you must pay the appraisal fee upfront. The appraisal ensures that you are paying a fair price for the home.
The contract includes an appraisal contingency to protect you if the home's appraised value is less than the agreed-upon purchase price. In this case, you have a certain number of days to cancel the contract, complete the purchase, or negotiate with the seller to lower the price to the appraised value.
Financing Contingency
This allows you to apply for and secure mortgage financing to purchase the property. It safeguards you if you are unable to secure financing, allowing you to cancel the contract and receive your earnest money back. You’ll have until a specific deadline to secure mortgage funding for your purchase. You also have until this date to terminate or request an extension of the contract.
House Sale Contingency
This will not apply to you if you are purchasing your first house.
If you’re purchasing your first house, this will not apply to you. If you’re selling your current house and buying a new one, this is significant because it gives you a set amount of time to sell and pay off your old mortgage before you can get a new one.
This can be frustrating for sellers since they must reject other offers while waiting for the contingency to be resolved. You are covered by this contingency if you are unable to sell your house for at least the asking price, and you have until a specific deadline to withdraw from the contract without legal penalties.
Inspection Contingency
Your agent will help you schedule a home inspection within a few days of your offer being approved.
The inspection contingency protects you by giving you a set amount of time after the inspection to renegotiate or withdraw your offer without incurring legal penalties if there are major damages to the house.
Before closing, there will be a final walk-through to check that the seller repaired any defects discovered during the inspection, if they agreed to do so.
Once the seller accepts your offer, it’s time to secure your financing.
Your lender will send you a Closing Disclosure, which is legally required for your protection.
The Closing Disclosure will be delivered to you at least three business days before your closing date and will contain all of the closing fees. After all loan approval requirements have been satisfied, your lender will contact you to confirm a closing date.
During the closing, you will sign the final paperwork and pay the charges necessary to legally transfer the property to you. The closing agent will then review and authorize the financing of your loan.
Congratulations, you are now a homeowner!
In most cases, this is the initial step in the mortgage process.
You should start your mortgage application here since it will offer you a better sense of your mortgage program and loan amount ahead of time.
You are requested to provide your lender with an overall picture of your creditworthiness.
You’ll begin by filling out a loan application.
A mortgage loan application requires you to provide your financial information to a lender, who will use this information to evaluate the amount you may borrow.
If you prefer to complete your loan application in person, you can meet with your lender.
Your lender will first check your income and request a copy of your credit record.
If your application is accepted, your lender will issue a Pre-Qualification Letter. This letter indicates that you meet the minimum FICO credit criteria and the lending requirements for approval.
A Pre-Qualification letter indicates that you fulfill the minimum FICO credit criterion as well as the lending requirements for approval.
Give your Realtor® a copy of the Pre-Qualification Letter as soon as you receive it. This helps them determine how much you can afford to spend on a property.
A Pre-Qualification Letter will help you narrow down your house search and persuade sellers to consider your offer more seriously.
WWhat are the six pieces of information that your lender requires to process a comprehensive loan application?
• Name
• Income
• Social Security Number (to obtain a credit report)
• Property address
• An estimate of the property value
• Amount of the Mortgage Loan
If you have any questions, ask your loan officer for assistance in completing your mortgage loan application.
Remember, your loan officer is always ready to help and will gladly answer any queries you may have. They will also review your application to ensure that all the information is accurate and valid. Once reviewed, your application will be processed for approval.
The Loan Estimate is a form that your lender must provide you; it is required by law for your protection.
Within three business days after submitting a complete mortgage loan application, your lender will give you a Loan Estimate. This document includes key details about your loan, such as the estimated interest rate, monthly payment amount, and total closing costs.
Check out the CFPB’s Loan Estimate Explainer to learn more about the Loan Estimate Form and understand key terminology.
Remember that the Loan Estimate is just that: an estimate.
At closing, you will receive a Closing Disclosure, which will detail the exact charges you will be responsible for.
As a homebuyer, you are not required to use the services of a real estate agent to complete the transaction.
However, we always advise all potential purchasers to do their homework and engage a trustworthy Realtor® to represent their best interests. A buyer’s agent is a real estate professional who has a fiduciary obligation to act on your behalf and in your best interests throughout the buying process.
A Realtor® can also provide information on houses and communities that isn’t readily available online. Best of all, it’s completely free!
If you need help finding a reputable Realtor® to represent you, you can always contact your lender for a list of qualified agents.
Setting up a Multiple Listings Service (MLS) search with your Realtor® is the simplest way to discover your new property.
• It can be set up to run automatically and send emails up to 5 times each day.
• Allows you to communicate directly with your agent about each property.
• Within the MLS, you can use search filters to narrow down results by locations, zip codes, cities, subdivisions, streets, school districts, and more.
• Provides all the information you need to buy a house in one convenient location.
One of the biggest advantages of using MLS to find a property is that it always includes the most recent listings and market changes.
Keep in mind that if you search on Zillow or Redfin, the property you’re looking at might be outdated and no longer available.
Now that you’ve been to a few open houses and found properties you like, you’re ready to make an offer.
Negotiating and getting an offer approved may take some time.
Your broker will draft a purchase contract with the terms of the offer once you’ve negotiated a price and the seller approves it. If the sellers accept your offer, they will sign and return the contract.
If the seller agrees to include any fixtures or appliances with the sale, ensure they are mentioned in the purchase contract. Don’t assume anything will be left behind if it isn’t specified in the contract.
AppraisalContingency
When your offer is approved, your lender will arrange an appraisal from a third-party appraisal business, and you must pay the appraisal fee upfront. The appraisal ensures that you are paying a fair price for the home.
The contract includes an appraisal contingency to protect you if the home’s appraised value is less than the agreed-upon purchase price. In this case, you have a certain number of days to cancel the contract, complete the purchase, or negotiate with the seller to lower the price to the appraised value.
Financing Contingency
This allows you to apply for and secure mortgage financing to purchase the property. It safeguards you if you are unable to secure financing, allowing you to cancel the contract and receive your earnest money back. You’ll have until a specific deadline to secure mortgage funding for your purchase. You also have until this date to terminate or request an extension of the contract.
House Sale Contingency
This will not apply to you if you are purchasing your first house.
If you’re purchasing your first house, this will not apply to you. If you’re selling your current house and buying a new one, this is significant because it gives you a set amount of time to sell and pay off your old mortgage before you can get a new one.
This can be frustrating for sellers since they must reject other offers while waiting for the contingency to be resolved. You are covered by this contingency if you are unable to sell your house for at least the asking price, and you have until a specific deadline to withdraw from the contract without legal penalties.
Inspection Contingency
Your agent will help you schedule a home inspection within a few days of your offer being approved.
The inspection contingency protects you by giving you a set amount of time after the inspection to renegotiate or withdraw your offer without incurring legal penalties if there are major damages to the house.
Before closing, there will be a final walk-through to check that the seller repaired any defects discovered during the inspection, if they agreed to do so.
Once the seller accepts your offer, it’s time to secure your financing.
Your lender will send you a Closing Disclosure, which is legally required for your protection.
The Closing Disclosure will be delivered to you at least three business days before your closing date and will contain all of the closing fees. After all loan approval requirements have been satisfied, your lender will contact you to confirm a closing date.
During the closing, you will sign the final paperwork and pay the charges necessary to legally transfer the property to you. The closing agent will then review and authorize the financing of your loan.
Congratulations, you are now a homeowner!