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Home Financing

There are six important steps in the mortgage process:

1. Research Products and Rates
   Your first step is to understand the types of mortgages available to you to determine the best type of mortgage to suit your needs. Then research current rates. Don't focus only on the interest rate; also look at up-front points and other fees.

    

2. Calculate How Much You Can Afford
   Your next step is to calculate the home price you can afford and the maximum amount you'll be able to borrow based on your income and assets. You will also want to determine the impact of a program on the mortgage interest deduction you will receive from the IRS. By understanding how much you can borrow, you won't waste time looking at properties you can't afford.

    

3. Get Pre-approved
   Prior to looking for a home, you will want to get pre-approved for a mortgage. This will help you confirm the home price you can afford and will give you a competitive edge when making an offer on a property, since the seller knows you are likely to close a loan. Be aware that a pre-approval of your loan is not the same as the final approval your loan receives from an underwriting department.

    

4. Apply for a Loan
   Depending on the lender you choose, you can complete a loan application online, over the phone or in person. If you apply online or over the phone, your mortgage counselor will send you a packet of documents, which includes your application and verifications for employment, bank deposits and income, for you to sign and return.

    

5. Processing the Loan
   The mortgage company will verify your application information through employers, banks, and creditors (as necessary). For the lender's purpose, as well, an appraisal will be ordered to determine the value of the home you are purchasing.

    

6. Closing
   While most lenders require 6-8 weeks to close a loan, some lenders are able to close in as little as two weeks due to state-of-the-art technology.

    

   Prior to closing, you will need to obtain a homeowner's insurance policy, along with a paid receipt for the first year's premium, and all other conditions must be satisfied. You will need to arrange a closing date with your real estate agent, builder, attorney or escrow officer and the title company.

    

   At the closing you will review and sign all of the documents required. You will be required to bring a certified check or money order for your down payment and closing costs. All of the funds and appropriate documents will be distributed. Upon completion, you will be given the keys to your new home!