Going through anything for the first time is harder to do because there are a lot of unknowns, and this includes the home loan purchases process. If you have never purchased a home before but are right now, you will go through the home loan process for the first time. During this time, you may have a lot of questions and confusion, but you can eliminate some of the confusion by understanding how the process works. Here is a breakdown of the main steps in the home loan process.
Work Through the Preapproval Process
While you do not have to get preapproved to get a home loan, it is better if you do. The preapproval process requires filling out an application with your details. It also requires the lender to research your credit and finances.
The point of going through the preapproval process is to make sure you qualify for a loan based on your financial position and credit score. If you do not qualify for a loan right now, you may want to wait for a while before reapplying. If you get preapproved, you can move on to the next step.
Find a House and Let the Lender Know
The good news about your preapproval is that it will tell you how much you can spend on your new home purchase. When you know the amount you can borrow, you can view homes that fit this budget. You can shop for a home as long as necessary to find the home you want to purchase.
Once you find the right one, call your lender right away and let them know. Your lender will need to see the purchase offer you submitted to the seller, as this document provides the lender with all the details needed to begin working on the mortgage.
Work Through the Steps Needed for Closing
Next, you will work with your lender to accomplish all the required steps. For example, your lender will order an appraisal, but you may get to choose the company that provides this service. Your lender will tell you what inspections you need, and you must order those. You will need to follow the instructions that your lender gives you. Each step in the closing process is critical, and you cannot close without these steps.
Once you complete everything, and after the lender is finished working on your loan, you can attend a mortgage closing appointment. This appointment is where you sign all the documents for the transaction and take over ownership rights of the house.