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Obtaining a mortgage can be intimidating and confusing. Similar to the buyer and seller guides, I’ve outlined the mortgage process for you in 4 easy steps!


Step 1: Mortgage Application


Before an application gets filled out, it’s important to first assess yourself financially. Figure out how much money you have and how much you need to borrow. It’s always critical to sort out how much you can afford so that when you apply for a mortgage you will be able to financially sustain yourself. A mortgage associate will help you determine that by phone, in person, or online. Once your application has been received, the mortgage application process will begin by verifying the information you have provided.


Step 2: Choose the Right Mortgage Program


Like all homes, mortgages also come in all shapes and sizes. You have to pick which loan is more aligned with your financial situation and goals. There are three basic types of home financing loans.

A) Fixed Rate Mortgage

A Fixed Rate mortgage usually has terms that can last up to 30 years. As the name suggests, the interest rate and monthly payments will remain the same for the specified term.

This type of loan should appeal to you if you:

  • Plan to live in the home for more than 5 years
  • Like the stability of a fixed interest payment
  • Think your income and spending will stay the same
  • Don’t like the risk of having a higher monthly payment

B) Adjustable Rate Mortgage

Adjustable Rate Mortgage (ARM) lasts for 3-5 years. But during these terms, the interest rate is usually locked for 3-5 years and then the loan can go up or down which means monthly payments can increase or decrease.

This type of loan should appeal to you if you: 

  • Plan to say in your home for less than 5 years 
  • Are comfortable with risk of possible payment increases in the future
  • Think your income will probably increase in the future

C) No Money Down Mortgage

There are several options of 100% financing loans depending on your situation.  VA, USDA and local lenders all have 100% financing options.

   You would like this loan if you have limited funds to pay your down payment or closing costs, because it will allow you to own a home with little or no money out of your pocket.

 

Step 3: Mortgage Submission and Approval


Once you select the appropriate mortgage program, you will submit this information to your mortgage associate along with any other required documentation.  After the approval, the associate will also review your commitment to the mortgage. Any additional documents that are required by the lender should be sent to the associate no later than 24 hours after the approval.


Step 4: Closing Attorney


The associate will send the mortgage instructions to your closing attorney to review and sign the documents. First you will review all the terms and conditions prior to signing to make sure the interest rate and loan terms are what were promised. Double check to see that the names and address are correctly spelled on the documents. Signing takes place in front of an attorney. There will be several fees with obtaining a mortgage and transferring property ownership which will be paid at closing.  You will also need to show homeowners insurance policy .

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