Mortgage Loans (Part 5)- Procedure

The procedure to obtain the mortgage loan

To apply for a mortgage loan, you need to have many procedure steps and it requires the paperwork on both buyer and lender. In this part I will shoe you how to get the head start by getting prequalified or preapproved for loan, you also know what lender will ask you and what you should answer them.

If you have an own home already and you just look for a refinance, you can skip this chapter, abd if you want to borrow money to buy a new house, the first step is to determine how much house you can afford and then start shopping for a mortgage. To get prequalified or preapproved mortgage, you have to negotiate leverage because the seller knows that you already have loan in your pocket and you will not be tempted to buy an unaffordable house.

1, Prequalification

It is known as a dry run of loan application process. The lender will use your details about credit, income, assets, debts to arrive at an estimate of the price of your house you can afford.

2, Preapproval

It takes prequalification one step, the lender will contact with your employer, your bank... to verify your information which you gave is exactly or not, then they will issue for you a letter starting that your mortgage is approved for certain amount within the certain time. You also may pay a small fee to cover the cost of your credit reports and your application.

3, Gain buying edge

You will be more attractive with sellers who do not need to worry about they will accept you to have loan turned down, and you will save your time closing when you find a home because the lender will complete the necessary qualifying and underwriting steps. But you your financial situation should be charged before closing to make sure to contract to you lender, when your prequalification and preapproval may no longer be valid.

When you talk to the lenders, they will want to ask you much before they approve for you loan to insure that they are safe when let you borrow money, after that they wll give you the application and justifiably.

The questions are often basic, such as where you work, how much you can earn in one month, how long you will be at work...

But they will have some questions about the outstanding debts, the cash reserves and assets, the down payment which you want, your purpose when you want to get loan, the property you will use and the type of your property. You should answer you are a steady employment with the same employer or in same line of work, you have low debt and you will have at least 2 months worth of mortgage payments in the bank after closing.