Step 1: Select a person or company to write the loan.
Don’t be intimidated, even if this is your first time buying a home. Look for the blog post titled – “The difference between a bank and correspondent lender”. Making a good choice here will make the following steps much easier.
Step 2: Get pre-approved for a loan.
The pre-approval helps in a number of ways. First, you get a better idea of what you can truly afford. This can be helpful in refining the home search process. It also serves to identify any credit issues that should be dealt with early in the process, before the issues cause problems. Knowledgeable loan officers will make this preparatory work go smoothly. We can identify and help clear any issues that arise.
Step 3: Make an offer on your dream home.
Having a competent loan officer in your corner can even be useful in this stage of the process as well. The loan officer can help find greater financing flexibility. This means the form of the loan can be altered to make your offer look better to the seller or allow you to stay within a budget during the negotiation process.
Step 4: They accept your offer!
Step 5: Complete loan application with a lender and they will order the appraisal.
The application documents will vary depending on the type of loan. The lender will collect these documents and pre-‘digest’ them so that the next step goes smoothly.
Step 6: The lender will submit the file to an underwriter.
The underwriter will return a decision of either approved or approved with conditions. Since you were pre-approved, you won’t have to worry about being denied. If there are conditions you must meet, they are typically minor and fairly easy to resolve and complete in the approval process. Once you have met the conditions, the package goes back to the underwriter for final approval.
Final Step: Closing.
This is where you will sign the loan documents, and officially become a homeowner (and get writer’s cramps). Congratulations, you have purchased your new home!