Mortgage Process


What really is Mortgage?
In the most simple of terms, a mortgage is a loan used to finance the purchase of a home. Under a mortgage, the buyer uses the home as collateral for the loan.

The top five mistakes of first-time home buyers:
1. Applying for a mortgage with unresolved credit issues.
2. No savings for a down payment and closing costs or borrowing to cover the down payment.
3. Going house hunting before being pre-approved for a mortgage.
4. Being unfamiliar with the home buying process.
5. Underestimating the expenses involved with homeownership other than the mortgage payment

Mortgage Process

Three Step Mortgage Process
Step 1 - Pre-Approval                                   
Step 2 - Learning about Credit                            
Step 3 - Banking on Mortgage

There are three simple steps that you have to follow if you think home ownership is all for you.

Step 1 : Getting Pre-Approved

Getting pre-approved for a mortgage is a good idea as it determines the size of the mortgage you qualify for and decides the price range for the homes you can look at.

Pre-approval helps you to :
--> Know how much you can borrow.
--> Confirm your ability to qualify for a mortgage based on your credit, financial and employment information.
--> Strengthen your position to make an offer on a house. A seller will be more willing to accept an offer if the buyer is pre-approved.

How to get pre-approved :
To become pre-approved, you'll need to work with a mortgage lender. The mortgage lender will review your credit history, earnings information, employment history and assets. You will need to provide certain documents to the lender to verify this information.
After the review, the lender will give you a "pre-approval letter." The pre-approval letter tells home sellers that you have the ability to qualify for a certain mortgage amount.
Getting pre-approved is not the same thing as getting pre-qualified. Pre-qualification simply states that the borrower qualifies for a loan based on some preliminary questions but does not commit the mortgage lender to approve the mortgage. The mortgage lender will still have to conduct a complete review of your financial situation, including your credit report and your income and employment history. The pre-approval process is more thorough. The lender does most of the work for full approval except for an appraisal and title search because there is no property identified to buy.

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