So you’ve decided to buy a home, that’s great! But don’t let the excitement of this new chapter in your life make you act irrationally. Proper spending habits and playing it cool financially is what can get you your dream home, and deviating from that plan last second could ruin your chances at getting a dream home. Read on to find out what to do (and what not to do) when first applying for a mortgage.
Knowing that mortgage rates have been reduced and home prices are also very affordable, this home-buying season may be one of the busiest in recent times. If you’re in the process of buying a home for the first time, you’re probably wondering about what you can do to help make the mortgage closing process smoother. To do this, it’s important to understand your role as well as your mortgage lender’s role is in the home-buying process. Read this article to learn more about what to expect during your mortgage loan closing.
Your Mortgage Company’s Role
Your mortgage lender’s role is to make the home buying process as easy as possible. Your banker or loan officer has to ensure you understand all the terms and conditions of your loan before you close on your loan.
Buying a home is a very complex and exciting (stressful maybe?) process. Communication is very important and the easier it is for your mortgage lender to reach you, the smoother the loan process will be. Be sure to let your banker or loan officer know your availability to avoid miscommunications.
Also, make sure you let your mortgage lender know everything that could affect your eligibility for a loan (e.g. other properties owned, actual hours worked, sources of income, etc.) so they can serve you better.
Mortgage lenders grow through referrals, and they want to make sure that you’re happy and satisfied with your experience so you tell your friends and family about it. If you have any suggestions, let them know! Any reputable company will be open to hearing about your thoughts.
Mortgage Closing Expectations
Typically it takes about 35 days from the time of signing an application to closing. If you’re interested in purchasing a short sale or a bank owned property, the closing date may be affected and it may take longer to close your loan.
Third Party Vendors
Keep in mind that mortgage lenders work with third party vendors who also impact the loan process, such as appraisers, title companies, real estate agents, etc. This means that sometimes the process may get delayed as further information is needed from them to close your loan.
One great feature of VA loans and FHA loans is that the seller may actually cover closing costs. For other types of loans, the closing costs can be rolled into the mortgage. If none of these situations apply to you, you may need to have funds available to bring to closing to cover closing costs, taxes and insurance. These costs mentioned are in addition to your down payment, of course.
Some things that may be included in your closing costs are:
- Flood Certification
- Tax Service
- Title Services
- Lender’s Title Insurance
- Owner’s Title Insurance
- Transfer Taxes
- Real Estate Agent Fees
- Filing Fees
- Prepaids or Escrow Reserves
- Pest Control Inspection
We hope this article helped you learn more about the roles and expectations of the lender and client during the mortgage closing process. Whenever you have a question do not hesitate to contact your mortgage lender. If you are just getting started in the process of shopping for a new home, contact us!
Good luck on your new home purchase!