When buying a home, one of the most important parts is securing financing. This is commonly referred to as a mortgage. A mortgage is a loan that a bank or mortgage lender gives to a person to help purchase a home. Taking out a mortgage to buy a home is common, which is why it is important to understand the ins and outs of the system and its process.
How Do I Get a Mortgage?
When beginning the process of getting a mortgage, the first step is to find a top mortgage lender or a bank. This can be done by doing some research online within your city and state to find the top lenders in your region. Another useful way to figure this out is through word of mouth by asking family members, friends, colleagues, and even experienced realtors if they have any suggestions. Once you find a prospective mortgage lender, it is important to ask the following questions:
- What types of mortgages do you offer?
- What are all the costs associated with getting a mortgage with your company?
- How long will it take for my mortgage to get approved?
- Where are your loans processed and underwritten?
What Documentation Do I Need?
The documentation that is needed to get a mortgage can vary. However, buyers generally need their social security card, one month’s pay stubs, and the past two years W-2’s. Other common documentation that may be requested can include a driver’s license, bank statements, asset statements, a fully executed purchase contract, and a copy of a money deposit check.
What is the Difference Between Pre-Qualification and Pre-Approval?
A common mistake when buying a home is not getting pre-approval. This is different from a pre-qualification. A pre-approval is a written commitment for a buyer from a mortgage lender. This can be attained by providing the same documents as necessary when applying for a mortgage. A pre-qualification is an estimation of how much a buyer can borrow. Being pre-approved can help a buyer beat out the competition for a house.
How Long Does it Take?
It is important to know that the amount of time it takes for a mortgage to get approved and financed can vary depending on the lender. This is why it is crucial to ask a mortgage lender how long it takes to get their loans closed. An experienced, top mortgage lender should be able to get it financed within 30-45 days from application. However, there are numerous factors that can delay this process. While going through the process, buyers should stay in constant contact with the lender to meet any possible needs.
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