Get acquainted with the basics of the home loan process for a smoother overall buying experience.
Find out how much home you can afford in advance. This step will increase your negotiating power because there is a higher likelihood of loan closing.
Provide paperwork to support your loan application, including income and asset documents.
The House Hunt
Shop for a house that aligns with your lifestyle and financial goals. A real estate agent can show you homes and negotiate the purchase on your behalf.
Working with a real estate agent, you will make a written offer to the home sellers. This offer will include, among other things, the price you are offering and the amount of earnest money you are putting down to hold the home through closing. The offer also will list any contingencies that could negatively impact the home purchase, such as home inspection results or financing falling through. The seller may counter offer, and the purchase negotiation begins.
Appraisal and Inspection
Once an offer is accepted, lenders require a property appraisal to determine the fair market value of the home as well as a title examination to determine if there are any outstanding liens or judgments against the property. Inspections may also be required based on loan type, and can help identify any safety or quality issues with the home.
Loan Decision (Underwriting)
The loan is approved or declined through the underwriting process. A conditional loan approval may be contingent on additional documentation or actions. In some cases, a counter approval may be provided with alternative loan options.
All final loan and escrow documents are signed. The lender confirms and completes the transaction with the necessary loan funds.