The Home Loan Process
Buying a home involves several important steps, but you do not have to navigate them alone. Your mortgage professional, real estate agent, title company, insurance provider, and other professionals will each help move the purchase toward closing. Although every transaction is different, most home purchases follow this general process.
1. Get Pre-Qualified or Preapproved
The first step is understanding how much you may be able to borrow and which loan options could fit your circumstances.
You will begin by speaking with a mortgage professional and completing a mortgage application. You may also be asked to provide documents such as:
- Valid Photo ID
- Recent pay stubs
- Bank statements
- W-2 forms
- Federal tax returns, when applicable
Your credit, income, monthly obligations, available funds, and other financial information will be reviewed. A pre-qualification or preapproval is not a guarantee of final loan approval. However, it can help you establish a realistic price range and demonstrate to sellers that you have already started the financing process.
If you have spoken with several lenders, compare their communication, service, loan options, estimated costs, and experience before deciding which lender you want to use.
2. Select a Real Estate Agent and Find a Home
Once you know your approximate price range, your real estate agent can help you search for available homes that meet your needs and budget. Stay in contact with your mortgage professional while searching. Property taxes, homeowners insurance, flood insurance, homeowners association fees, and other expenses can affect the total monthly payment, even when two homes have similar prices.
3. Complete the Inspection, Appraisal, Title Work, and Insurance
Several property-related items may happen during this stage.
Home Inspection
A professional home inspection evaluates the physical condition of the property and may identify items that need repair, replacement, or further evaluation. The inspection is primarily for your protection. It is separate from the lender’s appraisal.
Appraisal
The lender generally orders an appraisal to obtain an independent opinion of the property’s value and determine whether the home provides sufficient collateral for the loan. An appraisal is not a substitute for a home inspection and does not guarantee the condition of the property.
Title Work
The title company or closing agent researches ownership records and identifies liens, claims, restrictions, or other matters that may affect the property’s title. Title insurance may also be arranged as part of the transaction.
Homeowners, Windstorm and Flood Insurance
You will normally need to arrange homeowners insurance before closing. Depending on the property’s location and loan requirements, windstorm, flood insurance or other coverage may also be required.
4. Loan Processing and Underwriting
During processing, the loan team organizes the application, verifies information, reviews property documentation, and gathers any remaining items needed for underwriting. Continue making regular payments on time and avoid opening new credit accounts, financing major purchases, changing jobs, moving money between accounts unnecessarily, or making large undocumented deposits without first speaking with your mortgage professional. Significant financial changes may require the loan to be reevaluated.
5. Receive Your Clear to Close
Once the underwriting conditions have been satisfied and the loan has received final approval, the lender will issue a Clear to Close. The lender, title company, real estate professionals, and other parties will then coordinate the final documents, figures, funding requirements, and closing appointment.
You will receive a Closing Disclosure showing the final loan terms, projected payments, closing costs, and amount needed to close. Review it carefully and compare it with your Loan Estimate. Ask about anything that appears incorrect or different from what you expected. The Closing Disclosure must be received at least three business days before closing.
Ready to Begin?
Platinum Mortgage can help you understand your financing options, prepare for preapproval, and stay informed throughout the mortgage process.
Call (361) 695-3203 or contact Platinum Mortgage to get started.
Loan programs, qualification requirements, documentation, timelines, costs, and closing procedures vary by borrower, property, loan product, and transaction. Pre-qualification or preapproval does not constitute final loan approval or a commitment to lend.