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Steps In The Mortgage Process For Purchasing Real Estate

July 28, 2015
From Loan Officer Shellie Sexton

From Loan Officer Shellie Sexton

There are many distinct steps in the real estate purchase process, and many relate to obtaining a home loan. It may be confusing for both new and experienced buyers. This blog details important details about steps in the mortgage process for purchasing real estate and covers what you may want to know prior to beginning the process.

Steps In The Mortgage Process For Purchasing Real Estate

The Pre-approval

A pre-approval is an introductory review of your finances and credit report to estimate what you may be able to obtain for a loan amount. It verifies that you meet the preliminary criteria for financing. Pre-approvals are not a guarantee that you will ultimately receive a mortgage, but is an important first step in the mortgage process.

Mortgage Application

An application takes place typically after you have an accepted offer on a home. You may be asked for additional financial paperwork and information. The specifics on the home are also reviewed by the mortgage company. They will require a copy of the Purchase and Sales contract in order to proceed. Your contract may specify that you complete an application before a specific date.

Mortgage Appraisal

An appraisal is mandated by a lender (although you are in most cases billed the fee for it) to identify the current market value of the home. Appraisers will compare your property to others that recently closed in the area within a certain time frame. A specific dollar value is noted. Basically, the value of the home must justify the loan amount.

Mortgage Commitment

After your financial information and the details on the property are analyzed, the lender provides a commitment letter. This confirms that no major problems are present and that the mortgage company is fairly certain that the loan will obtain final approval. There may be outstanding conditions detailed in the letter such as an employment verification and additional credit check. It is therefore critical not to complete costly purchases or change your financial condition even after a commitment is issued as it may cause a loan to fall thru.

Clear to Close

A clear to close is essentially the final approval for financing. It indicates that all criteria have been satisfied and that the lender can release the information to the closing agent. This sometimes takes place within days or hours before the anticipated closing date.

The Closing

The closing entails signing of paperwork and filing of information into public record. Be sure to bring official identification and a money order or bank check for any amount due. Personal checks or cash are ordinarily not acceptable. The transfer of money occurs at or shortly after and the home becomes officially yours!

A Few Final Notes

Deadlines are an important facet of any real estate transfer, so make sure that you understand the deadlines and what you must do to comply with each one. Working with a experienced mortgage professional and real estate broker will be a big help. They can provide you with advice and assistance, monitor deadlines including the new TRID timelines, and ensure a more positive experience. As a local mortgage consultant, I can provide you with guidance through the mortgage steps. Contact me, at Guaranty Mortgage via 770-614-7425 or www.GuarantyMortgage.com.

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