For most people, there is no more significant a financial transaction in their lifetime than that of a mortgage loan. Despite its importance, getting a mortgage is infrequent enough for the average person that it can be a daunting process. However, it doesn’t have to be that way. In this series we are going through each step on the way to getting your mortgage to better help you be prepared for the process!
We have discussed preparing your finances for a mortgage, selecting a loan type, choosing your lender, and what to bring for the loan application process itself. Now we are to the final step—closing on the loan!
Once you’ve completed your loan application, your job is largely done. Your lender should return a loan estimate to you within three business days that will list exact rates, any fees, and the terms of the home loan you’re being offered.
After your application is submitted, the lender will arrange for an appraisal of the property you are purchasing to assess the value. This is typically done by a third-party company and helps to clarify to both you and the lender that a fair value is being paid for the home. In order for the loan to be approved, it will have to be appraised at the agreed upon purchase price.
Once this process is complete, the loan will go to underwriting. This is the start of the waiting game for you. It is important during this time not to take any actions which will impact your credit report, as this can cause issues with your closing.
It is important also that you respond promptly to any requests for information made by your lender, because any delay on your part can slow down the process of closing. You may be asked to provide explanation for late payments or collections, or any other questions about your credit history, employment, or income.
Once all those things are resolved, you’ll find yourself at closing day. Prepare to give your signature a workout as you sign a hefty stack of papers and have your aspirin on hand because you may have a headache from reading all the fine print. But once the dust clears, you will be officially a homeowner!