Applying for a Mortgage
Buying a house can be stressful. For first-time homebuyers especially, there is a lot of uncertainty around applying for a mortgage.
That is why preparing for and understanding the process can decrease some of the stress of applying for a mortgage.
Applying For a Mortgage is Very Common
There are many reasons why as a borrower, you would want to apply for a mortgage. The most obvious is that you cannot afford to buy the house in cash and need to make installment payments on it over the next 15 to 30 years.
With an adjustable-rate mortgage, your rate starts lower than a fixed rate. It then adjusts based on a predetermined index. Most adjustable-rate mortgages have a few terms: - Introductory rate - Period of the introductory rate - The maximum rate increase per adjustment - Maximum total rate increase - Amortization period
Applying for a Mortgage: Choosing a Fixed or Adjustable Rate
Applying for a Mortgage: 6 Steps
Because the prospect of getting a mortgage can be daunting, it helps to break down the process of applying for a mortgage into steps. It is really a process, and each step has a few things that need to be done by you, the borrower.
1. Pre-Approval The pre-approval stage of getting a mortgage is typically relatively pain-free. First, a loan officer will ask you some questions and get basic verification of your income and credit score.
2. Getting a Property Under Contract
Getting a property under contract is a prerequisite to moving forward with the lending process because the bank will need to consider the property you are buying. So after you've found a home, made an offer that both parties have agreed to, you can move to the next step in applying for a mortgage.
Most lenders will use what is called a 1003 Uniform Residential Loan Application. If you do not see this application and are going through a conforming loan process, there is a good chance that you are going through a bank's questionnaire and filling out details so that their software can fill out the form for you.
Swipe Up to learn MORE ABOUT Applying for a Mortgage
For More Posts Like This Visit The Frugal Expat