Whether you’re a real estate investor or purchasing a home for your family, you know how important the mortgage process is. Mortgage Professional Month recognizes the hard work that mortgage professionals do daily to help individuals and families achieve homeownership or add properties to their portfolios. Read along as we discuss the importance of this month, individuals involved in the mortgage process, and how to get a mortgage for real estate.
Contents of This Article:
Contents of This Article:- What Is Mortgage Professional Month?
- Who’s Involved in the Mortgage Process?
- How to Get a Mortgage for Real Estate
- Manage Your Investments With BMG
What Is Mortgage Professional Month?
National Mortgage Professional Month, observed in September, recognizes mortgage professionals working in the housing and financial industries. Northern Virginia property managers, investors, and aspiring homebuyers know how important the loan process is.
Many Americans dream of buying real estate, and most purchases wouldn’t be possible without mortgage loan professionals. Whether you’re investing in another property or buying your first home, mortgage professionals are there to help you through every step of the process.
But who are mortgage professionals, and what do they do? Next, we’ll discuss who’s involved in the mortgage process and their role in helping others obtain mortgage loans.
Who’s Involved in the Mortgage Process?
If you’ve never gotten a mortgage before, you may think it’s a simple process. However, there are several steps to getting a mortgage, meaning you’ll likely work with more than one mortgage professional. Here are some of the steps and people involved in the process.
- Mortgage Loan Originator– A broker helps assess your financial situation, gives you your loan options, and walks you through the process of finding the right mortgage loan.
- Loan Processor- Loan officers work for lenders, like banks or credit unions, and guide you through the application process. They help you choose the right loan, collect documentation, and submit your application for you.
- Underwriter- An underwriter evaluates your finances, credit history, and the property you’re trying to buy to determine the risk for the lender. Ultimately, it’s their job to approve or deny your loan application based on the information they have.
- Real Estate Agent- While they’re not directly involved in the mortgage process, real estate agents help you find the right property and negotiate the purchase.
- Appraiser- While your application is under review, you’ll need to find an appraiser to determine the precise value of the property you’re interested in. They’ll account for any necessary repairs, recent renovations that may add value, and the value of comparable homes in the area.
- Title Agent- If your application is approved, you’re one step closer to closing on the property. Before closing, a title agent searches to verify that the property is free of legal claims or liens. This helps protect you and the lender against future disputes over the property.
- Closing Agent- Closing agents finalize the last steps of the mortgage process, including signing documents, transferring funds, and ensuring everything runs smoothly. They help finalize the sale and transfer ownership of the property to you.
Ultimately, it’s their job to approve or deny your loan application based on the information they have. How to Get a Mortgage for Real Estate
If you want to get a mortgage for your next real estate purchase, you’ll want to know how to obtain a loan. Here are some of the steps to follow and people to talk with.
- Check Your Finances
- Compare Rates and Loan Types
- Find a Lender
- Get Preapproved
- Submit Your Application
- Begin the Underwriting Process
- Close on Your Property
Check Your Finances
You’ll want to be financially prepared to take on a large loan and the responsibilities that come with it. So, check how much debt you have, how much you have saved for a down payment, and calculate how much you’ll need to close on a loan. Additionally, lenders will look closely at your credit score to determine your eligibility for a loan. So, if your credit score needs work, try to build it before applying for a home loan.
Compare Rates and Loan Types
There are several types of home loans to consider. That said, the one that works best for you depends on your financial situation and the type of property you’re looking for. A few common mortgage options include the following.
- Conventional Loans- Conventional loans are the most common type of home loan and have stricter criteria than other loan types, so it’s important to have good credit.
- FHA Loans- FHA loans are backed by the Federal Housing Administration and are generally more lenient regarding credit score minimums.
- VA Loans- VA loans are backed by the Department of Veterans Affairs and are only available to active service members or veterans.
Additionally, there are different rates and terms to consider. For instance, you may choose a fixed-rate or adjustable-rate mortgage. On the other hand, you may choose a 30-year loan term or a 10-15-year mortgage.
Find a Lender
Find a LenderNext, it’s time to find a lender that best suits your situation. Luckily, there are several options, whether you choose a traditional bank, credit union, or non-bank lender. That said, if you’re looking at a specific loan type, like a VA loan, you’ll want to find a specialty lender.
Get Preapproved
Getting preapproved for a mortgage loan isn’t necessarily required, but it’s beneficial in many ways. For instance, it helps determine whether or not you’re eligible for a loan and gives you an idea of how much a lender will give you. So, consider getting preapproved by a few lenders to compare rates and explore the best option for you.
Submit Your Application
Getting preapproved doesn’t mean that you’ve secured the loan. You’ll still have to submit your financial information to formally apply for a mortgage loan. For instance, you’ll need to provide documentation such as:
- W-2 forms and tax returns
- Pay stubs
- Proof of other sources of income
- Bank statements
- Debts
- ID and Social Security number
Begin the Underwriting Process
Getting preapproved for a loan doesn’t automatically mean you’ll get financing from the lender. Ultimately, the decision is up to the lender’s underwriting department. During this time, you’ll need to get a home appraisal and inspection to determine the market value and whether or not there are any major issues. The underwriter then determines the risk for the lender and decides on an appropriate loan amount, interest rate, and other terms.
Close on Your Property
Once you’ve been officially approved for a mortgage, there are just a few more steps before the process is complete. For instance, your lender will require you to get homeowners insurance, they’ll suggest you get title insurance, and you’ll want to review your loan estimate and closing disclosure to see if there are any major changes. Once you pay the closing cost and sign all the necessary paperwork–you’ve got a home!
Manage Your Investments With BMG
In honor of National Mortgage Professional Month, it’s important to recognize the essential steps involved in securing a loan and the dedicated professionals who make it happen. So, whether you’re buying your first home or purchasing another income property, know that it takes a village!
Need More Advice? contact us today!
Are you expanding your rental portfolio and need help managing it all? Bay Property Management Group can help! Our team of dedicated professionals can help with every step in the rental process, from marketing your property to collecting rent, performing inspections, maintenance, and more. Contact us today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
