The mortgage process is a rather extensive period that can be somewhat confusing for first-time home buyers. Although you will work primarily with a loan officer while applying for a mortgage, there are several institutions at work to determine the interest rate of your loan and provide funding for your home. Here is a look at the steps required to apply for a home loan:
1. Pre-approval from a lender: Getting loan approval prior to looking for a home is ideal because it allows you to understand what type of home you can afford and gives you negotiating power when making an offer on a house. Your personal information, including basic employment information and proper identification, will be required so that the lender can run your credit. Your credit score will be a large factor in determining the interest rates that you are offered.
2. Home appraisal: Before your loan is approved, the property you are buying will be appraised by a 3rd party in order to determine its value. This is beneficial to you and your lender, as it ensures that you do not pay more than your home is worth and prevents you from taking out a loan larger than necessary.
3. Loan approval: This is the longest step in the home buying process because it is when an underwriter will verify your employment, income, assets, and tax information. Preparing all the necessary documents ahead of time can accelerate this process, but you should expect it to take at least 2 weeks.
4. Closing: Once you have been approved, you will need to sign all the necessary documents to close your loan and distribute funding.
There are still many low to no money down home loan programs available. Click below to get the list of low money down home loan programs in Washington State.