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Steps to the Perfect Loan
Written by
Craig Wales
Published on
10/29/2024
Tags
Mortgage Process & Options
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Mortgages can feel intimidating, especially if it’s your first time buying a home.
Between understanding loan terms, managing paperwork, and navigating the approval process, it can be overwhelming. However, when you break it down step by step, the path to homeownership becomes much more manageable.
We believe that buying a home should be an exciting milestone—not a stressful one. That’s why we’ve created a simple road map to guide you through the process, so you’ll know exactly what to expect every step of the way. From pre-approval to closing day, we’re here to make your journey to homeownership as smooth and straightforward as possible.
Our Rate App is designed to provide the best mortgage experience possible. Having a connection to your loan officer and their team in the palm of your hand is like a homebuying superpower. It makes the whole homebuying process a breeze. Download the free Rate App today and supercharge the process.
As soon as you decide to start on your pre-approval, here are the steps you’ll follow until you get the keys to your new home.
Step 1: Give e-messaging consent
After getting in touch with a loan officer, you’ll be sent an electronic consent form by email. By giving your consent to receive messages, our loan officers have permission to send files safely, quickly and electronically. This helps get the ball rolling and speeds up the process for everyone helping with your mortgage application.
Step 2: Send required documents
Safely and securely send any documents asked for by your Loan Officer or someone from their team through the Rate App or through your online portal. These documents help your loan officer verify your fitness for a mortgage and they typically include, but are not limited to:
Proof of income: Pay stubs from the past two years, and tax returns.
Employment History: Documentation of your employment for the past two years.
Proof of assets: Bank statements, retirement accounts, and investment account summaries.
Credit History: Recent credit report information
Identification: A driver’s license or passport and your Social Security number.
Debt and Expenses: Information on your current loans, credit card bills and other debts.
Step 3: Sign your initial application
Confirm your applications by eSignature when it is sent to you virtually.
Step 4: Receive your pre-approval
Once your conditional approval has been issued, your Loan Officer or a member of their team will send you the pre-approval letter. If you’ve applied for a PowerBid Approval, that means that your letter will help you compete with cash buyers by providing full underwriting credit approval, which can be more effective than the traditional pre-approval letter and helps speed up your buying process.
This official document includes:
The approved loan amount
Loan terms and interest rate
Down payment amount
Expiration date of the pre-approval
Any conditions required for final approval
Now is a great time to start looking at homes.
Step 5: Finalize your homeowner’s insurance
Found your home? Great! Now get insurance for it. Find an insurance company you like or use your Loan Officer’s recommendation and apply for homeowner’s insurance. The insurance company will need to see a copy of your preliminary loan approval info. Before you sign anything, make sure your homeowner’s insurance is effective on the day of closing.
You can also find insurance through the Rate App.
Step 6: Send any outstanding documentation
Sometimes there is missing info that needs to be confirmed. Send any requested documentation or forms requested by the loan coordinator through the Rate App or your online portal.
Step 7: Confirm appraisal report
Review the appraisal report receipt and confirm there is no structural damage or other red flags on your property. If you see anything you don’t like, let your real-estate agent and Loan Officer know and talk about how you’d like to handle the issues. In general, you have three choices if something pops up on your home inspection report that you don’t like:
Continue with the home purchase knowing you’ll need future repairs
If you go this route, you’ll accept the red flags and take on the responsibility of fixing them. Or getting used to living with them. If you’re handy, or build some renovations into your budget, this may be the option of least resistance.
Ask the seller to fix the issues
Talk to your real estate agent about going back to the seller and ask them to take care of the repairs themselves. They can usually do this in one of three ways: Take the cost of the repairs off the purchase price, offer to pay for the repairs themselves or take care of fixing the issues themselves.
Terminate the deal altogether
If the red flag reveals enough of an issue that you don’t feel comfortable buying the home, the home inspection gives you the ability to walk away from the deal. There may be a cost associated with terminating the deal, so talk with your real estate agent if you decide to go this route.
Step 8: e-Sign the preliminary closing disclosure
You’ll receive this from your Loan Officer, or someone from their team like the Mortgage Consultant. This disclosure will contain your initial estimate, so you’ll know how much money you’ll need for your closing.
Step 9: Review Final Closing disclosure
Once you approve your Final Closing disclosure, wire your required funds to the title company.* You can also obtain a check made payable to your title company/closing attorney.
Step 10: Celebrate!
Congratulations — you just became a homeowner! Show up to closing, sign the papers, and you are good to go. Perhaps you want to start getting the invitations together for a housewarming party?
Here to help
That’s all it takes. Once you’ve completed the steps to secure your mortgage, you’re well on your way to becoming a homeowner.
We understand that questions or concerns can arise at any stage of the process. That’s why we’ve built a team of dedicated mortgage experts who are just a phone call or email away. Whether you need clarification on a document, want to check on your loan status, or have any other inquiry, our team is here to help. Even after you’ve closed on your home, you can reach out if you have questions about refinancing your mortgage or tapping into your home equity.
*Before wiring any funds, call the intended recipient at a number you know is valid to confirm the instructions – and be very wary of any request to change wire instructions you already received. A Rate employee will never provide nor confirm wire instructions.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Rate for current rates and for more information. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate, Inc. Rate, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Rate does not provide tax advice. Please contact your tax adviser for any tax related questions.
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