Mortgage Guide for First Time Home Buyers
Most first-time clients I’ve worked with have told me that choosing a home to purchase can be such a burden, but they often forget that it is only one of the components that goes into closing a deal for their dream home. Mortgages are the second part of that process and sometimes clients gloss over the nuances that go into getting approved for the loan to purchase their home. At Vadillo Realty Team, we think that getting a mortgage can be a complex process, but just because it is complex, it doesn’t need to be scary. Here is a light guide that describes the mortgage process. As always, consulting a mortgage professional and a tax advisor are recommended prior to purchasing a home.
Determine how much you can afford: Before you start looking for a mortgage, you should have a clear idea of how much you can afford to borrow. You can use an online mortgage calculator to get an estimate of your monthly payments based on your income, expenses, and other financial obligations.
Shop for lenders: You should shop around for the best mortgage rates and terms. You can start by contacting several lenders, such as banks, credit unions, or mortgage brokers, and ask about their interest rates, fees, and requirements. Make sure to compare the annual percentage rates (APR) of different loans, which include both the interest rate and the fees.
Apply for pre-approval: Pre-approval is a process where a lender reviews your financial information and gives you a conditional commitment for a mortgage loan. This can give you a better idea of your budget when house hunting and help you negotiate with sellers.
Provide documentation: To apply for a mortgage, you will need to provide documentation such as pay stubs, tax returns, bank statements, and proof of employment. The lender will use this information to verify your income, assets, and credit history.
Complete the underwriting process: The underwriting process is where the lender reviews your loan application and documentation to decide whether to approve your loan. The lender will assess your creditworthiness, including your credit score, debt-to-income ratio, and other factors.
Close the loan: If your loan is approved, you will need to sign the loan documents and pay any closing costs. The lender will then fund the loan, and you will become a homeowner.
It's important to note that the mortgage process can vary depending on the lender and the type of loan you choose. It's a good idea to work with a professional, such as a mortgage broker to help guide you through the process. I’m more than happy to help though the process and make introductions to the right mortgage broker. for questions, please get in touch with me at ernestina@vadillorealty.com
