For many people, getting a mortgage can be an intimidating process. They don’t know where to begin or what happens once the loan is approved. To make this process easier for you, this article will discuss two important stages in obtaining a mortgage: first, taking out the loan; second, after the money has been received and your house is completely paid off. These should help you through both steps of the process.
First Stages Of Taking Out A Mortgage Loan
There are four basic steps involved when taking out any type of loan – application, verification, underwriting and funding. If you have applied for any sort of loan before then this will be nothing new to you as these are basically common sense terms used by most financial institutions.
The first step in taking out a mortgage loan, also called application or pre-qualification, is simply filling out an application form. This document will ask you the basic questions about yourself and your financial situation so that the institution can assess you as a borrower. Make sure not to leave any of these questions blank or incomplete as doing so could delay or even stop your loan request from being processed.
To avoid making mistakes on this important stage of the process it is advisable to visit several different lenders before settling on one prime lender who will provide you with all necessary information needed for approval. Once everything has been verified – usually by your employer, bank(s) and real estate agent – your application will be sent to the underwriting department of the bank.
The underwriting department is responsible for checking all your details on the application form against legal documents. The verification process was done before moving to this stage, but here the staff look over everything once more just to make sure that nothing has been missed. This is probably one of the most important stages in completing your mortgage loan application successfully because it is sometimes where mistakes are identified and corrected.
For example, if you had written down an incorrect amount on your actual income then this will need to be fixed before you can proceed with the next step of your loan request. While these corrections are being made you will usually be asked to provide further supporting documentation so that the underwrites can fully assess everything about you as a borrower.
Funding stage of getting a mortgage is the final stage where you will find out how much your borrower can borrow and for what terms. After you have presented all documents to support your application then the amount that you requested will be credited into your account within 2-3 business days. The interest rate for this loan, as well as other fees like processing costs, appraisal costs and closing costs will also be shown to you at this time. Finally, the standard repayment schedule (annuity) for paying back your loan along with its interest charges would be discussed in detail so make sure that you fully understand everything before signing the final paper work.