The thought of owning your own home is exciting! However, just buying a home without understanding the mortgage process can be confusing. There are quite a few steps to go through before those house keys are in your hand. It will take a few months to get everything settled and the financial part of it in order. Here are the steps you need to take before you sign your name on the dotted line.

  • Research Homes and Organize Your Information: One of the most fun parts of buying a home is researching the area you want to live, as well as determining the home you can afford. When you apply for a mortgage there are a few things you will be asked to provide:
    • How much you make in a month.
    • How much debt you have and what you’re paying each month for them.
    • What assets you have such as investments, savings accounts, mutual funds, etc.
    • What your current credit score is.
    • Tax information from the past two years, including child support, public assistance, alimony, pensions, etc.
    • How much you’re willing to put down upfront for the home. Depending on your situation lenders can work with you for the down payments if you need assistance.
  • Getting Pre-Approved: Keep in mind this is not getting a mortgage, this is strictly just telling a lender confirming you are able to apply for a mortgage. Getting a pre-approval allows your real estate agent to determine what homes you can afford.
  • Understand What Market You’re Getting Into: It’s important to stake interest in several homes. There can be multiple buyers looking at these homes, therefore don’t totally invest yourself in one single home. Once you’re home is under contract, it’s time to start considering renovations, inspections, and other pre-purchase services.
  • Getting the Mortgage: Once you’ve decided on a home, it’s time to apply for a mortgage. It’s during this process where you’ll need to explain any financial situations including foreclosures, bankruptcies, delinquencies, and more.  Remember, the lenders won’t judge you on your situation; it’s to make sure you’re able to pay the mortgage back, in full, during the allotted time.
  • The Loan Processing: This is the time where the loan is processed and all of the information provided is fact-checked. This process could take the most time because not only are they checking your information, but they’re also checking property appraisals, inspections, etc. 
  • Wrapping Everything Up: Once you get the green light from the lender for the loan, you have three days to review everything to make sure it’s what you and the seller want. As long as there are no big changes, which could start the process all over, documents are signed, money is exchanged, and you are a homeowner.