Buying a Home: The 5 Steps to a Perfect Loan
We’re putting the focus on the parts of the home buying process that more directly involve you. Because after all, this is your house that you’ll be buying and living in! Here’s some info on the five steps that will have you thinking about paint colors and new furnishings in no time.
Step 1: Mortgage Application
To kick off the home buying process you need to fill out Guaranteed Rate’s online mortgage application (credit report included) and provide the following, most up-to-date documents:
- Paystubs covering most recent 30 days
- Asset statements covering most recent 60 days
- W-2s covering most recent 2 years for all employers
- Tax returns covering most recent 2 years-required only if commissioned, self-employed, or using other types of income found on personal and/or business tax returns (e.g. rental; dividends, etc.)
- Contact information for employment verification
You’ll likely need to provide more documents depending on your specific situation, but these are the essentials.
Step 2: Home Shopping
Here’s the fun part: With your pre-approval in hand and your real estate agent in tow, you can begin shopping for your dream home! Keep in mind that during the pre-approval process, your estimated taxes, HOAs, assessments and insurance costs were assumed. So, if you find a home with home ownership costs that exceed your assumed liability, you’ll want to reconnect with your Guaranteed Rate mortgage professional right away.
Step 3: Signing the Contract
Next, it’s dotted line time. After signing the contract, your loan file will be primed and sent to the underwriter. Submitting the stuff below in a timely manner will ensure a much smoother home buying process:
- Executed contract
- Earnest money
- Updated income and asset documents
- Other relevant documents your mortgage team will request (they will order your appraisal, property title, tax transcripts and many other verification reports)
Step 4: Conditional Approval
You’re almost there! When your loan is submitted and underwritten, you’ll get a conditional approval returned. This is an approval subject to items an underwriter needs to clear your loan to close. Documentation requests can range anywhere from an updated pay stub to a letter from your CPA explaining your self-employed earnings. Every loan scenario is different, so requested documents will vary from loan to loan.
Step 5: Closing
High five! You did it! When your final documentation is approved and your loan cleared to close, your closing mortgage team will:
- Confirm your closing date and time
- Prepare your closing package
- Confirm all fees
- Send your file to title company to prepare for closing day
Congratulations, you’ve joined the wonderful world of home ownership! We may have exaggerated a bit when we said that shopping for your dream home is the fun part. Receiving the keys is the really fun part, because that’s when you can start planning your housewarming party. And be sure to hit Pinterest for some new appetizer recipes stat!
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