Ready to buy a home but you don’t know where to start? The first step in the process is to secure your financing. It’s important to know how much a lender will give you to purchase a home before starting the search.
After doing your research and choosing a lender, here is what you should know about the mortgage process.
Pre-Qualification & Pre-Approval
Getting pre-qualified and pre-approved for a mortgage loan can be very helpful during the home buying process.
Mortgage pre-qualification is a general estimate of how much a lender is likely to let you borrow. This step is typically taken as an opportunity to gather options from different lenders.
Unlike pre-qualification, the mortgage pre-approval process is more of a definite confirmation of your creditworthiness – without having to sign a contract. This will give you a better idea of your specific price range and help you create a more accurate home budget.
Once you apply for pre-approval, a lender will look at your income, assets and credit score to determine how much you can be approved for, as well as an interest rate. If you have a larger income and higher credit score, you may have an easier time paying back the loan. Therefore, you can often get approved for a larger amount with a lower interest rate.
General Timeframe: 1 to 3 days
The Home Search
The most exciting step in the mortgage process is finding your dream home! Now that you know what you can afford, the search can be narrowed down to homes that fit your budget.
By Carrier has many new communities with custom homes to fit your needs and lifestyle choices! In addition to top-notch construction, we offer an Industry-Leading 5-Year Warranty on structural defects, roof leaks, basement leaks, electrical, plumbing, interior climate control, windows and exterior doors.
General Timeframe: 4 to 6 weeks
Finalizing Your Loan
After submitting your offer and receiving acceptance from the seller, it’s time to start finalizing the loan. During this part of the process, you will officially apply for a mortgage. There are a few steps that occur while the home loan processes.
First, your lender will ask for an appraisal to determine the market value of the property you are purchasing, using similar properties in the area to determine this value. You will then have a home inspection completed to uncover any issues or repairs the property may need. Finally, a title search officially transfers property ownership from the seller to you!
General Timeframe: 3 to 4 weeks
Underwriting is the process in which a lender determines the risk of approving your loan and whether to accept it. The lender will also verify that the information you provided, including your income, assets and credit score, is valid.
During this step, the lender will also determine how they believe you can pay back your loan. When the underwriting process is complete, you will be able to finalize the deal.
General Timeframe: 1 to 2 weeks
Now it’s time to close on your new home! During this last step of the mortgage process, you will need to finalize all terms of the sale and perform a final walkthrough. This is your last chance to make sure the property is ready and all repairs were completed as promised. Finally, you will sign the paperwork and the lender will make the transfer of funds to the seller before you move in.
General Timeframe: 2 to 3 days
Start your home search by exploring By Carrier’s custom communities! Schedule a tour today.