One’s own home is the best place to live in with a peaceful and comfortable set up that can be established based on the owner’s interest. But buying your own house is not a simple task, and it involves a lot of effort and money to make the dream come true. Also, even for some of the renovations or improvements in the existing house, it requires a lot of funds to get the work done quickly. When the self-financing is not enough to meet the costs of buying or repairing the house, then home loans would be the best option for many people, which can be repaid over time.
Usually, many steps are involved in the approval of home loans, and the process is not as simple as getting money withdrawn from the bank. There a few verification steps and filling up of documents that need to be completed before approval of a home loan.
Most of the mortgage companies follow these four main steps for the approval of home loans. They are discussed as follows.
- The amount that can be borrowed
Before approaching the mortgage companies for home loans, the borrower needs to have a precise estimation of the amount that they need to borrow. They need to know their capability to repay the amount in installments every month for the loan taken.
- Pre-qualification for the loan
This is the place where borrowers save most of the money. In this step, the applicant has to give his details such as about his employment, his assets, and his residence history and so on. Then the mortgage companies get the applicant’s permission to run their credit score. After reviewing all the provided information, the applicant is given a Pre-qualification letter. This letter is very important and needs to be handled with care. The reality agent will use this letter to make the best offer on the house you choose, and the seller also will know that you are prequalified.
- Application for the loan
When the offer is made and accepted, the loan application has to be completed. It is not a difficult process and can be carried out online.
- Accepting the terms and sighing the agreement papers
The realty agent and the seller will be working together to designate an escrow company who will be handling the funding process once it is approved. The mortgage company will also be coordinating with them to check whether all the papers have been submitted and are in order. The applicant will be needed to sign in some papers at the escrow company, which is the final process in availing the loan.
Simple, isn’t it? Mortgage companies do most of the work, and all you need to do is pick the best house that is right for you and prepare to move in.