There’s no denying that the real estate industry is a booming one. In fact, approximately six million homes were sold in the U.S. last year. This figure was projected to increase by about seven million this year. Despite the global pandemic, individuals continue to invest in residential and commercial properties.
On a personal level, home-buying can be quite fulfilling. Not only does it allow you to own a house, but it also helps you start a family and carve your future. However, you may put this dream house on hold if you don’t have the financial means. That is where mortgage loans come into the picture as a way to help you seek funding for your prospective house.
Unfortunately, getting a mortgage appears to be confusing and daunting to some. Fret not, as we’re here to help you out with your home-buying journey. If you’re looking to get a mortgage, here are seven easy steps to take:
1. Check Your Finances
Buying a house starts with a vision of a dream house. But many aspiring homeowners tend to delay this dream due to financial constraints. If you’re fortunate enough, go ahead and kick off your home-buying journey. But, it goes without saying that you have to assess your finances and set your budget first. Even if you get a mortgage, there’s still a lot of expenses involved. These include the initial deposit, miscellaneous expenses, and closing costs.
2. Get a Pre-Approval
Once done assessing your budget, you can now proceed to the next step—the pre-approval. This process entails determining how much money you can borrow from a lender to buy a house. You can shop around from various lenders to look for a potential mortgage deal. Once decided, you can request a pre-approval letter from a particular lender. They will then send you a letter showing how much they can lend you based on your credit, income, and savings. This step is crucial as it gives you a greater chance of buying a house.
3. Look for a House
At this point, you can go ahead and look for a house. This stage can be the most exciting part as you search for your dream home. You need to know where to look at such as property listings showing various houses and land packages for sale. That said, be sure to hire and work with a real estate agent. These professionals know the ins and outs of the real estate industry. After visiting properties, you can now choose a property and make an offer.
4. Have a Home Inspection
Once you and your home seller agree on an offer, you can now request a home inspection. This process entails a thorough examination of the actual condition of a property. The inspection report will show in detail the various parts of the house. These include the structure, foundation, plumbing, electrical system, and even roofing. This also helps you gauge some potential home issues requiring repairs or replacements. Finally, it will help you decide if you would like to continue with the offer.
5. Get a Home Appraisal
After the inspection, you can now complete your application. But, a critical aspect of the home-buying process is getting the house appraised. A home appraisal aims to assess the value of a property. This occurs when you’re buying, selling, or refinancing a mortgage. Your lender will get a third-party appraiser to come up with an estimate. This process ensures that you’re paying a fair price for the house you’re purchasing.
6. Complete Your Application
After the appraisal, you can now complete your application and submit it to your lender. Once done, the whole mortgage processing begins. This process includes underwriting, credit check, title search, and tax transcripts. Also, your application details such as your bank information will be verified. At this point, you just have to wait for the final approval from your lender.
7. Close the Deal
After your lender approves your application, you are all set for the big day—closing. Your lender will send all the closing documents to the title company or closing attorney. One of these is the closing disclosure showing the final details about the mortgage loan. These include the loan terms, monthly payments, fees involved, and closing costs. Just be ready to read and sign all the pertinent documents to close the deal. Once done, you’re now officially a homeowner.
Getting the right mortgage from a reliable lender can make your dream house come true. All it takes is to follow the steps outlined above to keep you guided on your home-buying journey. After all, owning a house can be your life’s biggest asset and greatest investment.