The Mortgage Process: An Overview

Making the decision to purchase a home is an amazing milestone in anyone’s life. Owning a home can be wonderfully rewarding and can be a great financial investment over time. As with any major investment or momentous occasion, you want to know what you’re getting into up front. In this week’s blog, the Nickel City Funding, Inc., professionals will walk you through each step in the mortgage process. While the specifics of home financing are unique to each contract, the basic steps are the same for most privately funded mortgages across the United States. If you are looking in North Tonawanda, Hamburg, Amherst, West Seneca, Lancaster, and nearby New York, contact us for personalized guidance.

Today, we’ll focus on the main points involved with finding and securing the underwriting for your home loan, with less focus on the real estate portion.

Prequalification and Preapproval

When you begin looking for homes, you need to know how much financing is available to you. Qualified brokers and lenders can help you secure “prequalification” or “preapproval” letters. These letters show sellers that a lender is willing to lend to you for a certain amount. To determine this amount, your broker will evaluate your financial history and current financial status, including your credit score, debt-to-income ratio, and more. Once you have this letter, you can move to the next step in the mortgage process.

Making an Offer

You’ll work with a real estate agent or Realtor to find a home you love as you proceed with the homebuying process. Once you’ve found a home you love, your agent will help you make an offer (a complex process that we won’t discuss in this week’s blog). Your agent will work with the seller or the seller’s agent to make an offer with which you’re comfortable. The seller may choose to accept or reject an offer, and you can come back with a counter offer, all of which is handled by your real estate agent. Once your offer is accepted, your lender will complete underwriting, which is the paperwork that outlines each specific detail of your loan contract.

 Appraisal and Inspection

Your offer will include contingencies that must be met before final closing can begin. These include the completion of an appraisal and home inspection. The appraisal verifies to your lender that the home you wish to purchase using their money is worth its value. The inspection protects you from buying a home with hidden problems and unforeseen costs. Once these are completed, this information is included with your underwriting paperwork.

Closing Time

Closing begins once your lender has completed underwriting and it is time for everyone to sign paperwork. You must receive something called a closing disclosure at least three days before the actual closing paperwork is signed. This disclosure is a document that outlines all the most important specifics of your loan. While this may feel like a hassle, this three-day period is an important window in which you can carefully ensure that you are 100% comfortable with all the specifics of your contract. Once the wait period has ended, you’ll supply your agreed upon deposit, and all involved parties will sign their paperwork.

The Mortgage Process, Simplified

When you’re ready to learn more about home financing, contact the mortgage professionals at Nickel City Funding, Inc. We would love for you to become one of our clients in North Tonawanda, Hamburg, Amherst, west Seneca, Lancaster, or nearby New York. We work with top private lenders and we can provide the most competitive rates around. Contact us when you’re ready to get started.