Do you want to get a mortgage, but don’t know how? In this article I will go through the process for you to be able to get a Mortgage. The process seems very complicated because borrowers are unaware of where to start, but once they become aware of the process they can do much better.
There is no time limit to how long the process takes. The housing market in New Jersey is tough so I’ve seen borrowers take anywhere from 2 weeks to 2 years from beginning to end. In this article I will show you how to get approved quickly and exactly who to contact.
1. Get Pre-Approved for your Loan (Mortgage Lender/Loan Officer)
What does getting pre-approved for a loan mean? First, you have to decide how much you can pay per month for a mortgage. After that you go to a mortgage broker (never go to a bank), and the broker will refer you to a loan originator/officer. I am a loan officer, so if you have any questions I can answer them for you.
The loan officer will ask you some basic questions, and approve you for your mortgage. Pre-approval letters are what the lender is willing to give you.
‘Pre-approvals are simple to get done because the computer system decides how much to approve you for. The Loan Officer isn’t part of the decision making’
You don’t have to have a pre-approval before you choose a house; however, buyer’s agents and seller’s agents prefer that you do. Your offer can move easier through the pipeline. So, first things, first, contact a loan officer and get a pre-approved letter.
2. Search for Your Dream Home (Real Estate Agent)
This is the best part in the process. You get to pick out your best affordable home. You are going to need the help of a realtor in this process. If you don’t know of a realtor then your loan officer can get you in touch with one.
My advice would be to go on Zillow, and go to open houses on the weekends. This way you don’t really need a real estate agent for looking at houses. You will need a real estate agent for putting in offer. The agent can strategize how much above or below the asking price you should offer.
Congrats! The offer you put in was accepted, and now we move onto the next step.
3. Getting a Mortgage Rate (Lender)
Go back to the lender that pre-approved you, and tell them that your offer was accepted. The loan officer will then go on, and tell you the rate that you qualify for. In my case, I always provide the lowest rate possible. That is just me. However, if you don’t trust that your loan officer gave you the lowest rate then you can go to other lenders, and they will quote you a rate as well.
‘Search for top lenders, and create a list of 10 lenders (including the lender that pre-approved you). Pick the one with the lowest rate’
This is the part when you should ask as many questions as possible. Ask the loan officer which loan is right for you, and how you can structure the loans to be more in your favor. The officer will kindly answer all of your questions.
4. Appraisal, Processing, and Underwriting (Lender)
This is not a process which the borrower worries about. The lender chooses the appraiser which provides a fair value to the house. An appraiser is an independent person who assigns a fair value to the home.
Processing and underwriting go hand in hand because the processor checks account balances and orders credit reports. If everything goes well, then the processor passes the file to an underwriter.
The underwriter double checks that you did not lie about anything. Underwriters check to see if you have anything that credit checks might have missed. When the underwriting is done, then you will move on to the last part of the process.
5. Closing Time (Title Company)
Again, there is nothing for the borrower to do in this step. Yoru lawyer picks a title company they work with, and the title company makes sure that everything is okay with the house. Title also makes sure that the house can legally pass down to you.
The Real Estate Agent will be present at the place of the closing. Be ready to go through a 30 minute process in which you and the co-borrower will be signing over 50 pages of documents.
‘Congratulations! You are officially done. All parties will smile at the end of the process because everyone got what they wanted (hopefully).’