How to Apply for Home Mortgage?
To have a safe and comfortable home probably belongs to the top of the list when it comes to people’s life goals. Unfortunately, not all are able to afford acquiring one in an instant. As such, most turn to home mortgage to finance their housing needs. The article below discusses the ins and outs of home mortgage, including the steps in applying for it.
What is Home Mortgage?
To put it in the simplest terms, a home mortgage is assistance (also known as a loan) that is granted by a bank or other financial organizations for the purchase of helping an individual acquire a home. With this said, “home” could be a primary home, a secondary home, or an investment property on the part of the owner.
In home mortgage, the owner of the property passes on the property’s title document to the lender. This is done for the purpose of ensuring that the latter will have an assurance that the borrower will pay back the amount he owes. In return, the lender will return the said title to the borrower once the latter has made the last loan payment and the other conditions surrounding the mortgage loan have been fulfilled.
How Does One Apply for a Home Mortgage?
With all the talk about home mortgage and its benefits, one burning question remains. How does one apply for it? The list below shows the steps that an individual must undergo through to possibly qualify for a home mortgage.
Before even applying for the home mortgage, make sure that you are fully prepared to do so. This means the confirmation of having a strong credit score as well as an impeccable credit report. You should also have a general idea regarding the mortgage type that you want. Afterwards, research and comparison of lenders should also be accomplished. A borrower should then get preapproved to borrow a specific amount of loan. Pertinent papers should be compiled and potential homes must have been selected. Now you are finally ready to apply for a mortgage.
The first step in the application of a home mortgage consists of filling out a mortgage application. In theory, this step should take around 45-60 minutes. This step also involves seeking out lenders and getting preapprovals for potential homes that the borrower wants to own. An even easier method of accomplishing this step would compose of asking an authorized loan representative to fill out the indicated form while the borrower provides necessary information via phone or in person.
The second step is going over your loan estimates. This takes from one to several hours. This step is essential to the borrower since it gives him the chance to compare several lending institutions. By reviewing pertinent information as to the terms of the mortgage, a borrower can decide which offers suits him or her the most.
The third step is picking a lender and committing to them. This may mean thinking twice or thrice before making the final choice. Factors to consider when choosing include how responsive and trustworthy the potential lender is. Once he has chosen, the borrower can now contact the lender.
The fourth step is the actual processing of the mortgage application. This is estimated to take around 2 to 3 weeks. During this time, the information which the borrower has provided to the lender is carefully scrutinized and fact-checked to ensure its truthfulness. A borrower must remain contactable and be ready to answer further questions or provide additional pertinent documents.
The fifth step consists of what is termed as “underwriting.” At this stage, a home mortgage is almost ready to be granted. What the borrower needs to do is to remain responsive to the lender’s queries and provide what else is needed.
The sixth and last step of applying for a home mortgage consists of the so-termed ”clearing the loan to close.” At this point, all the borrower can do is to wait to hear from the lender the words: “Congratulations! You are free to close.” This simply means that the application is finally approved. You are now responsible for determining whether you want to continue with the loan or not. Just be ready to submit more papers if so requested.
And there you have it. The steps on how to properly apply for a home mortgage. Happy house hunting and best of luck in doing so!
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