Home Loans For Newbies: The 4-Step Mortgage Process

You've already found the perfect house to buy and you've decided to get a mortgage. But this is your very first time buying a house, and for that matter, the very first time you will be getting a home loan. Let's get things straight. First off, getting a home loan doesn't just happen overnight. It's generally a four-fold process.

STEP 1: GO COMPARISON SHOPPING FOR HOME LOANS You're often looking at a 15 or 30-year mortgage. Compare home loan refinance companies. Pay particular attention to the APR or the annual percentage rate as well as the interest rate.

STEP 2: GET PRE-QUALIFIED Though not necessarily a requirement, a pre-qualification letter is important for some sellers. This pre-qualification letter will let sellers know that you are financially capable of buying the house. It will be easier to buy a house especially when you have a pre-qualification letter from the best home loan refinance companies.

STEP 3: GET PRE-APPROVAL To get pre-approved, the lenders will verify the information you've told them against your supporting documents. It's basically a simple background check to look into your paying capacity. Once you're pre-approved, you will be given a conditional letter which will state the exact amount of loan available to you.

STEP 4: FINAL LOAN APPROVAL Last but not least, get that loan approved. How do you do this? Once the seller accepts your offer, your lender will conduct an appraisal. The appraisal is the official verification of the lender that you are indeed buying your home at a reasonable market price.

Getting a home loan is that simple. But of course, it all starts with knowing what kind of mortgage you should get. Clueless on what kind of mortgage fits your needs? See what the experts have to say in this video: