Mortgage Process for New Home Buyers

So you’re interested in taking advantage of the 2009 home buyer tax credit, but not quite sure of how to go about beginning or working your way through the mortgage process. Let’s take a look at what you need to know:

Complete the Mortgage Loan Application – when you’ve found the home you love, get in touch with a lender of your choice and let them know you’d like to start the mortgage process.

Financial Documentation – in order to complete your application, the lender will need documentation of your employment, assets, and debts, as well as the purchase price of the home. You will likely need to provide your pay stubs along with a copy of your tax returns for the last two years.

The Appraisal – A lender will send an appraiser to the home you wish to buy; he or she will calculate how much they believe the house is worth by doing a comparison of the selling prices of homes that are similar in the area. If the house doesn’t appraise for as much as the price you’ve agreed on with the seller, you will be required to pay the difference out of pocket as part of the down payment. You may request another appraisal if the results of the first are unsatisfactory.

Good Faith Estimate – You will need to pay the closing costs of your new home; the lender is required to give you a list of all costs – fees, insurance, and taxes – to ensure you can afford these before you proceed with the loan process.

Application Review – Your lender’s processor will check the information you’ve provided to determine if anything is missing; additionally, he or she will contact the credit bureaus to verify your credit history.

Underwriter Review – If you have a strong credit history, your mortgage loan application will go to an underwriter; this is the person who will make a final decision as to whether or not you will be accepted or rejected. If rejected, the lender is required to let you know the reason(s) in writing.

Mortgage Closer – The next stop for your paperwork is the mortgage closer. He or she will prepare the documents for closing on your new home completing the loan process.

Closing Attorney – You will close on your new home in an attorney’s office or at the real estate agent’s office with a lawyer present. All of your lender documents will be brought to the closing for your signature. Once you’ve signed everything, the seller hands over the home’s keys, and you will be the owner!