Steps to Getting a Mortgage
- Getting Pre-Qualified
- Income Verification
- Appraisal: Once you’ve found a house you like that fits your budget and have made an offer on it, a lender will conduct an appraisal of the property. This is to assess whether the amount you offered to pay is appropriate based on the house’s condition and comparable homes in the neighborhood. The cost of the appraisal will vary from a few hundred dollars to over a thousand, depending on the complexity and size of the home.
- Title Search and Insurance: A lender doesn’t want to lend money for a house that has legal claims on it. That’s why a title company performs a title search to make sure the property can be transferred. The title company will research the history of the property, looking for mortgages, claims, liens, easement rights, zoning ordinances, pending legal action, unpaid taxes and restrictive covenants. The title insurer then issues an insurance policy that guarantees the accuracy of its research. In some cases, two policies are issued: one to protect the lender and one to protect the property owner.
- Underwriting Decision: Once the underwriter thoroughly reviews your application, the best outcome is that you are approved for a mortgage. That gives you the all-clear to proceed to closing on the property.