When it comes to buying a house, there is a laundry list of things to consider and do, from the ideal floor plan for your family to the amount you can afford. Finding a home loan, however, is one of the first items to cross of the list. The mortgage process can seem like a confusing mess, especially to first-time home buyers, and lenders often gloss over the steps and leave you out of the conversation. However, here at The Reichert Mortgage Team, we want you to be as informed as possible when it comes to YOUR home loan. That’s why we’ve broken down the steps of the mortgage process for you!
1. Finding a Mortgage Lender
The most important part of the home-buying process is finding a local mortgage lender who has your back: someone who answers your questions and has your best interests in mind. Since the mortgage process is filled with complex laws terms and restrictions it is crucial to have an ally that is dedicated to finding you a perfect loan that fits not only your needs but also your wants. This step is often overlooked however this is one of the essential parts of the mortgage process. Different lenders provide different loans based on the loans they have at their disposal, which is why it is important to do your research. For instance, if you are a veteran looking to buy a home in Colorado Springs, you’re going to want to find a VA approved lender, rather than just anyone. A VA approved the lender will have different VA home loans available that are specially designed to assist veterans in becoming homeowners. They will also have knowledge of how and who can apply for these specific loans.
What Is A Mortgage Lender?
A mortgage lender is considered a bank or financial institution that offers home loans. A lender will have very specific borrowing guidelines used to verify the creditworthiness and ability to repay the loan. The lender is affectively the institution that is lending you the money to buy your home.
What Is A Mortgage Broker?
A mortgage broker is usually referred to as the middle man in-between you and the lender. The mortgage broker will act as an intermediary and will broker loans on behalf of you an individual or business in search of a loan. Because of this brokers are different in that they can shop around for different loans and rates, which might make a difference in your financial future. Affectively a broker is similar to a private dealership that attempts to pair you with the car to fit your needs. The lender is like the supplier of cars.
2. Getting Pre-Approval
Once you’ve selected a qualified lender or broker, they can begin to review your financial situation by examining important financial documents. This may seem like an unnecessary step, but in reality, it is quite advantageous to you as the home buyer. During pre-approval, a lender writes the applicant a letter stating that they qualify for a loan of a certain amount. This letter demonstrates to the seller that you are a serious buyer, placing you above other prospective home buyers. This is also a good time to consider what payments you can afford, which will aid in the loan and house hunting process.
3. House Hunting and Purchase Agreement
Next is the best part—hunting for your dream house. As you search from neighborhood to neighborhood, you can choose to have a reputable real estate agent by your side. Once you’ve found your dream home, the agent can help you make an offer, which can also include contingencies such as house inspections or repairs. If both parties agree to the offer it becomes a purchase agreement.
4. Applying for the Loan
While your lender does not play a huge role in the house hunting process, they do come back into the picture when it is time to apply for the loan. There may be various mortgages that you qualify for, so the lender will inquire about your commitments and ask you to provide documentation to determine which mortgage best fits your needs. Most Colorado Springs mortgage lenders have a traditional application packet that you’ll fill out. It’s also a good idea to have W-2s and bank statements ready, along with explanations for discrepancies in your credit history so that the lender can best help you.
After this, all the behind the scenes processing takes place with your loan. The main determiner, the underwriter, checks for accuracy within the application, along with your eligibility. Ultimately, the underwriter approves or rejects the loan, sometimes with conditions.
6. Closing the Loan
If everything reviewed is found acceptable, then the loan is finally ready to close. Your lender will provide finalized details about the loan. Be sure to allow plenty of time to close the loan, as there may be some specifics to conclude. Likewise, bring two forms of identification to the meeting. After signing the papers, congratulations—you own a home!
Mortgage Broker Colorado Springs |The Reichert Mortgage Team
If you’re looking for a reliable mortgage broker to help you through this process, contact The Reichert Mortgage Team for more information. We are a full-service mortgage broker, located in Falcon, CO. We help homeowners all over Colorado Springs get approved for the home of their dreams, all while doing what is in the best interest of them and their financial future. Call today for mortgage solutions guaranteed to surprise and to set up an appointment to speak with one of our home loan exsperts!