Nothing marks your passage into adulthood more than having to pay a mortgage. The process may seem daunting at first, but with some help from this guide you will be on your way to owning your first home.
Shopping For a Loan
Just like shopping for the actual home you should also shop around for a mortgage loan. Compare interest rates from different lenders or closing costs. In all honesty shopping for a mortgage loan can be just as hard as finding a home you like.
The first step after finding a mortgage loan you like is getting pre-approved. In this process you meet with a mortgage lender so they can go over your financials. They look at everything from your income to your debts to make sure you are financially capable of handling a monthly mortgage payment. Their pre-approval is the key in getting the mortgage loan you want. A list of items you need for this process can be found here.
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Getting the Home Appraised
At this step in the process, the lender sends out a home appraiser to see what their loan is being used on. It is the appraisers job to appraise the home and assess the market value. Three things can happen in this situation.
One the appraiser can determine what you applied to pay for the home is the same as their appraisal. Two the appraiser can determine that the home is worth more than what you agreed to pay for. In this case you don’t have to do anything because it just means you are getting a good deal. Third the appraiser comes back and determines the market value is lower than what you agreed to buy the house. In this scenario you may have to end up paying for the difference because the mortgage loan is based on the market value of the home. Or you could try and have the seller agree on the lower price.
Close the Deal
If you make it this far then it is smooth sailing from here. The last thing that has to be done is you have to pay a title company to do a title search. Here they are looking for any possible records showing the home could belong to someone else. This is if there are any heirs that are claiming the title. Or if there are liens on the home from contractors who never got paid. If all is well then you can close the deal and be officially a homeowner.