When homebuyers in California are considering taking out a mortgage or refinancing their house, they can feel overwhelmed by the seemingly complicated loan process. The mortgage process can be easy to navigate if homebuyers understand these five key steps.
Step 1: Identify Needs
Before homebuyers can secure financing, they need to determine what their situation is. Homebuyers should ask these practical questions to guide them to the right starting point in the mortgage process:
- Is the current source of income stable?
- Is employment stable for the foreseeable future?
- How much reserve funds are currently saved?
- How many funds are available for a down payment?
- What is the estimated timeline for staying in the new home?
Step 2: Shop For Loan
While it might seem backward to shop for a loan before looking for a house, homebuyers will want to get a sense of what they will be able to pay monthly and the funds they will be able to borrow.
Related: Types of Mortgage Loans
At this stage, most homebuyers seek advice from a reputable mortgage lender, like JVM Lending. A mortgage analyst will be able to advise homebuyers and help them find the best loan product for their situation. Mortgage analysts will determine if a 15 or 30-year term loan is better or if a fixed-rate or adjustable-rate mortgage will work better with their financial situation.
Step 3: House Hunt
Homebuyers will likely have an idea of what style of home they are interested in or what neighborhoods they would like to purchase property in. Most people choose to enlist a reliable real estate agent since their expertise and knowledge of the area are useful when looking for a home. Once homebuyers have found a home that satisfies their standards, it’s time to make an offer.
Step 4: Offer Accepted
Homebuyers will work closely with their mortgage lender to determine a closing date, sign all of their documents for Underwriting and Escrow. If everything is in order, they will begin transferring their down payment funds to escrow and finalize their mortgage application paperwork.
Step 5: Closing Date
The last step for homebuyers is their closing date and recording of the title! The last checks from the bank will be exchanged, and homeowners will officially own a new property in California!
This blog is a very simplified guide to the mortgage process. Each homebuyer’s financial situation is unique; speaking with a Mortgage Analyst is the best way to determine which home loan will work best. The JVM Team is available 7-days a week by phone at (855) 855-4491 or by email at [email protected].