Mortgage loans provide the opportunity for potential homeowners to finally own a house, but the processes involved can be challenging for one to navigate.
But don’t worry, as there is a way to simplify this process; all you need is proper guidance and instruction on the method.
It shows that more people can afford to buy homes, and it will boost the housing market and economic activity.
Weighing all these factors, this blog will explain every step of the process to acquire the home loan easily and understandably.
Check Your Finance
Owning a perfect home with a backyard where one can organize fun meetings with buddies and homies is the dream of many.
But to have it in reality and savor the moment, you need to take a close and careful look at your finances.
To put it simply, if you are thinking of owning a house or a property, there are some factors you need to take into consideration, most probably, your economic state.
Such as your credit score should be as high as possible, and that is above 670, which can also get you much better rates.
Your savings are also very pivotal because you’ll need a down payment that’s usually 5-20% of the home’s price.
You can also make use of free credit check tools or try Experian or Credit Karma, which will help you make a better decision.
If you notice that your scores are low, work hard to pay down your debt before you decide to apply.
The data below demonstrates that the mortgage lending market size is expected to reach a market value of around US$25 Bn by the end of 2030
Get Pre-Approved
Pre-qualification can be the simplest step, but it’s usually not enough to get before applying for a home loan
On the other hand, when you get pre-approved, this means that you will get a mortgage, and getting pre-approved will show sellers that you are a serious buyer.
This will give you a big advantage in a competitive market by assisting you to shop within your budget, and your interest rate will be locked.
This is where a good home loan broker, such as Borro, can help you, as they are usually familiar with the things they are dealing with.
They know which lenders will approve a mortgage, and you can get better deals than when you go directly to a bank.
Look for the Best Mortgage
You have lots of options to choose from when proceeding with a home loan, but you must also keep in mind that not all of them are the same.
In fixed-rate mortgages, your rate will stay the same forever, and on adjustable-rate mortgages, you can start low, but rates can change.
The second choice can be a bit risky, but it starts at a lower price, and government-backed loans are easier to qualify for.
Always compare rates from at least 3-4 lenders, even those small differences can save you a lot of money over time.
Find the Home
The whole process is indeed daunting, but this is probably the most fun part, where you lie back and look for the perfect house for you.
And when you finally find one, contact your real estate agent, and they will help you make an offer.
If that offer is accepted, then you can finally enter escrow, where things become serious, and there is no backing up.
Do You Know? Home mortgages as we know them were first introduced into the American housing market in the 1930s.
Complete Your Mortgage Application
Filling out your application can be a bit complicated as they often require your specific data details.
However, to make it less complex, make sure you have your pay lists, tax returns, statements from the bank, and proof of any other assets.
The lender can order an appraisal to make sure the house is worth what you are paying.
Once everything is done and in the right order, you will be one step closer to becoming a homeowner.
Finally, Close the Deal
This is the time that everyone is patiently waiting for because everything you did in the past will finally pay off.
But be sure that this is not the end, and there are also some procedures you’ll need to do, for example, you have to review and sign a lot of documents.
You also have to pay some of the closing costs, which usually amount to 2-5% of the total loan amount.
And finally, now is the time for you to get those long-awaited keys – congratulations, you are finally a homeowner.
Enjoy your new life in the house of your dreams.
This process can sometimes sound terrifying and hard, but it doesn’t have to be as all you need is some patience and the right organization.
Try to fix your finances as much as possible, do good research, and don’t make any huge decisions right away.
Once you get all these things in the right order, you can rest easy as the process will surely run more smoothly.
