Getting A Mortgage: Step by Step

How Do I Shop For A Home?

If you’re looking for a new home, you’ve come to the right place to do so at Mortgage Align.  This is step is about your search for the perfect home.  At this point, you should know what you can afford with our affordability calculator, filled out one of our free consultation forms and received a quote from several possible lenders.

Many first time buyers don’t know the value of a good real estate agent.  First and foremost, real estate agent fees are paid by the seller.  For you, as a home buyer, their services come at no cost.  Additionally, having an experienced third party on your side can make negotiations between you and a seller a lot easier.

Fill out our form below to be matched with a real estate agent in your area who can go to work for you – 100% free!

Getting Pre-Approved For A Mortgage

Once you’ve been matched with a lender, it’s time to get a pre-approval for the loan amount you need.  A pre-approval is simply a commitment from your lender to let you comfortably search within a given loan amount, which is not tied to a specific property.  To be pre-approved, a lender must complete a review of your current financial status (gross monthly income) and debt information.  When approved, the lender has determined your risk and decided that you have the ability to pay back the loan.  Ask your lender for a pre-approval letter and give it to your real estate agent.  This will make potential negotiations between you and the seller a lot easier as they can see that a lender has cleared you for the sell price of the property.

How Much Home Can I Afford?

The first thing you should consider when searching for new home is how much of a home you can afford.  The best place to start is to look at your gross monthly income.  This number is what you make per month, not what you take home (net income).  Taxes or other contributions are not included in this figure.

Affordability Calculator

Documents You Will Sign When You Close Your Home Loan

When you close there will be numerous documents that you will need to sign to complete the closing process.  Use your attorney or real estate agent to review these documents before you sign.

• Real Estate Settlement Procedures Act (RESPA) – this document simply informs you about the closing process and the financial obligations for your mortgage
• Truth in Lending Disclosure Statement (TIL) – this document contains the terms and conditions of the loan.
• HUD-1 Form (settlement statement) – this form notes the payments made by all parties in the transaction.
• Mortgage Note – this is your commitment as a buyer to repay the mortgage.  It will include the loan amount, interest rate, payment information, maturity date and the change dates (for adjustable rate mortgages).
• Security Instrument – sometimes referred to as your mortgage or “deed of trust.”
• Warranty Deed – this is the deed that transfers the title from the seller to the buyer.

The Home Loan Closing Process

Closing day the homebuyer and seller will complete the legally binding transfer of the house.  During this process the buyer will:

• give the lender a receipt to prove acquisition of homeowner’s insurance
• review the HUD-1 settlement statementpresent checks to cover the closing costs
• sign all closing documents
• establish an escrow account to cover property tax, insurance and interest
• buyer receives title and keys to property
• recording of warranty deed and security instrument by closing company

Next Page »