Before you go house shopping, you should know more about the process of mortgage loans and how long this process is. Fortunately for you, we’re living in a time where the need for long waiting lines isn’t really a common thing, thanks to the wonders of digitalization.
But, with all that said, getting a loan for your home isn’t as straightforward as some of you think. Digitalization might work for wonders for out online shopping, but a house loan still takes time and a lot of paperwork to finalize.
And while the waiting time has still improved from the past, it’s not ideal. But hey, you get what you get and we’re going to give you an extensive guide to getting a mortgage loan in 2023.
So, without further ado, let’s start.
How Long Does the Process Take?
The process can be very lengthy and very hard. This is mainly because it involves several things, to say the least.
The first thing on the list is to get pre-approved. Waiting to get pre-approved is the smartest thing you could do before you actually go house shopping.
Fortunately, pre-approval isn’t as tedious as some of you think, but it does involve a few things. First off, you need to decide whether you’re comfortable paying X amount for your mortgage every month. This could be any price under the sun since it depends on the location, the size of your soon-to-be home, and various other factors.
You could make the decision yourself by calculating how much you can actually spend each month. If you’re comfortable with X amount each month, then you’ve pre-approved yourself.
The second thing you could do to determine how much you can spend is to use a reverse mortgage calculator at reversemortgagereviews.org. This is a free tool that can be found with a simple Google search. The tool has multiple inputs for your monthly income and debt payments, and you get a pretty accurate estimate at how much you could spend on your mortgage.
There are also other factors that need to be taken into account, so do have that in mind.
Of course, the last thing you could do is actually have a professional come at taking a look at your financial situation is to determine how much you could pay.
What we’ll say about this is welcome to the world of financial tech, or fintech. Through the use of software, a lender will willingly determine your financial strength and determine how much you could afford to pay on your mortgage each month.
All in all, pre-approval could take anything from a day to 30-days and it all depends on your lender.
The Mortgage Process
You could still start the entire process even before you find a home suited for your needs.
Truthfully speaking, you shouldn’t wait to find a home to start the mortgage process. The quicker you react, the more options in terms of homes you’ll have available.
What you shouldn’t do, however, is submit the offer, since a seller will want to see your pre-approval before they accept your offer. We talked about the pre-approval process, but we should also mention that this process could take a lot of time.
Getting pre-approved is one thing, but the lender looking into your financial situation that includes anything from debt-to-income ratio, credit rating, etc, could take up to several months.
Once everything is in order, your lender will notify you and give you an extensive report on how much financial strength you could separate each month for the purpose of paying off the loan.
We should also mention that different lenders will offer you different mortgage rates based on a number of factors. That’s why you don’t need to jump at the first offer that you see, and determine the lender based on your needs. If you’re looking for the best lender in the market, then the experts at mortgagesbyjill.com are definitely ones you should get in contact with.
Once You Find a Home
The next step is to move in, right? Well, not so fast as we haven’t really talked about the actual mortgage.
The mortgage process might starts with you finding the best possible lender for your needs, but this is where the appraisal process also starts. The appraisal process starts with you finding your dream home, and there is no point in applying for the loan before that.
The process of the appraisal can also be quite lengthy, and it depends solely on your ability to get an appointment with such an agent.
The last process that takes place is the underwriting process. This is a very important process where the appraiser looks over and reviews all of your financial information needed to get the loan.
This process is done to make sure no mistakes have been done during the previous processes and to make sure your application has no misleading claims on it.
If this process goes smoothly, then the next thing you’ll do is get the mortgage loan you’ve so desperately needed to buy your house.
Known Problems During the Entire Process
Like many things in life, getting a mortgage loan is a process that a lot of mistakes and problems can occur along the way, to say the least.
According to experts in the industry, some of the most common problems that people have to go through are delays during the process. We talked that you could wait for months to get appraised due to delays.
But other problems also involve the IRS. Namely, tax transcript verification is something that people wait for a long time from the IRS. The IRS is supposed to forward this information to the lenders, meaning the faster they work the faster you’ll get approved.
But it’s not only tax transcripts that are the problem. Other factors include employer verification, also from the IRS, and one problem that you can greatly prevent; you turning in needed documents to the designated bodies in a timely fashion. Namely, the more you delay on the documents, the more the official bodies will wait on your behalf. If you take too long, sometimes the borrower might even include a fee.