fbpx Skip to main content Skip to footer

How To Apply For A Home Loan: Step-By-Step Guide

How To Apply For A Home Loan: Step-By-Step Guide

As a home buyer, you’ve probably heard the words “home loan” mentioned many times. But what exactly is a home loan? And how do you apply for one? In this post, we’ll answer these questions and more.

First, Figure Out How Much You Can Afford

You’ll want to consider your monthly income and subtract your existing expenses, like mortgage payments and car loans. Then add any other recurring monthly expenses that you may have (student loans, credit cards, etc.). This is the number we’re going to use from this point forward!

Find A Mortgage Lender To Pre-Approve You

When you find a mortgage lender, you should consider a few things. The first is the lender’s experience. If they specialize in buying conventional or VA loans, they will likely know more about these types of mortgages than if they specialize in FHA loans.

If you’re looking for an experienced home loan adviser, check out their website and see how long they’ve been in business and how many clients they have helped. You can also look up their license number with your state’s department of banking or finance to make sure it is valid (and check them out with the Better Business Bureau).

You should also be aware that not all lenders get approved by all government-backed agencies like Fannie Mae and Freddie Mac as well as Veterans Affairs (VA) loans. One or two agencies may only approve some lenders while others may have access to multiple agencies—so make sure your agent can help you get qualified for any loan before starting the application process!

Once You Have A Pre-Approval Letter, It’s Time To Start The House Hunt In Earnest

Once you have the pre-approval letter in hand, it’s time to start looking at homes. You can do this independently or hire an agent to help you out.

If you work with an agent, keep in mind that they get paid when they close a sale. This means that sometimes they’ll pressure buyers into making offers and signing contracts before they’re ready just so that the agents don’t lose money on their commission (and may even encourage buyers to stretch their finances). 

After you make an offer on a home, your lender will ask for documentation of your financial situation.

You may be surprised at the paperwork involved in applying for a mortgage! The lender will need to verify that you have enough income to pay back the loan and that there are no other debts or expenses that might jeopardize your budget.

The following items are required from applicants:

· A copy of the buyer’s W-2 form(s)

· A copy of the borrower’s 1099 tax form(s)

· A copy of the past two years’ tax returns (with supporting schedules)

· Documentation proving payment history for all credit cards, loans, and debt obligations

· Documentation proving payments made towards any liens against properties owned by applicant or spouse

Prepare For Closing Costs And Hidden Fees

Closing costs are the fees associated with buying a home. They can be paid in various ways, including cash, check, or money order.

You will need to pay certain fees related to closing on your loan and registering it at the county courthouse (known as recording fees). This is typically handled by title company at your closing. These fees vary widely by state and county. Still, they typically include an attorney fee (if not included in your contract), an appraisal fee (paid for by the buyer), and other services related to finalizing the sale.

 Move In

Once you’re approved for financing, it’s time to move in. Congratulations! You’ve got a new home, and now it’s time to start making it a place you can call home.

Let us guide you home.