An Overview of the Mortgage Process
Becoming a homeowner isn’t an easy decision. If you’re currently renting, you may not have to deal with maintenance or property taxes. Many rental agreements cover utility costs, too. As a renter, though, you can’t easily redesign or landscape your space, and Fido or Tigger may not be welcome unless they’re fish.
Buying a house has both financial and emotional benefits.
- Your monthly mortgage payments can be predictable (with annualized adjustments if you have an escrow account for taxes and insurance); you'll have no unexpected rental increases.
- You’re investing in an asset that may increase in value over time.
- Over time, the equity you have in your home may be able to provide funds for helping you secure a loan for emergencies or large projects.
- You’ll have a space that is yours, where you can knock down and rebuild walls, hang your artwork, and settle in.
- You’ll be part of a neighborhood, a community that shares schools and stores, activities and events.
If you’ve decided to buy a house, you have several decisions to make, including how you are going to finance your purchase. Almost 80% of homebuyers rely on mortgage loan financing, according to a 2018 survey from Zillow.
Our team at Level One Bank has outlined the steps to follow as you go about getting the mortgage process started with your Michigan bank.
Applying for a Mortgage – When, Where, and How
When to Apply
The phrase ‘better to start early than to finish late’ neatly sums up when to apply for a mortgage. Before you start a serious search for your new house, it’s useful to get pre-approved for a mortgage. Knowing you have financing available makes your offer more appealing to home sellers and eases your stress when you find the right house.
Getting pre-approved with some of the best banks in Michigan helps you in three ways:
- The pre-approval process tells you how much you can afford to borrow. Check out Level One Bank’s Mortgage Calculator for a rough estimate. Having a budget based on your pre-approval will direct your house-hunting efforts. You won’t lose out on a property because you can’t afford it.
- Completing the mortgage process with your bank can take between 30 and 60 days; 30 days in a normal market and 45 to 60 days during high volume months. Your pre-approval smooths out your home-buying experience by reducing the chance of delays and unexpected problems.
- Pre-approval is an advantage if you are competing with other potential buyers who haven’t gone through the process. Getting pre-approved for a mortgage tells agents and sellers that you are serious about buying a house.
If you have about 20 minutes and would like to talk to a mortgage loan officer to get the process going, contact a member from our team today.
Where to Apply
As you start the mortgage process, you'll need to decide where to apply for your loan. You have several options available including credit unions, mortgage brokerages, savings and loan (S&L) companies, and banks in Michigan. The 2008 Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), mandates a nationwide licensing and registration system for residential mortgage loan officers.
With a safety net providing reassurance that lenders are qualified, you can get a good mortgage anywhere, right? Not exactly. Each lender will have different loan terms and programs. Fixed or adjustable interest rates, discount points, fees, and down payment assistance programs are some of the many items your mortgage loan officer will help you navigate. Getting trusted advice from a mortgage professional at Level One Bank can save you time and money.
How to Apply
After you have selected your mortgage lending partner, you are ready to apply for your loan. Level One Bank has streamlined our mortgage application process to take about 20 minutes.
The mortgage process will vary by lender, with most offering several ways to apply including in person, by phone, or online. You’ll provide information about you and anyone else you intend to list as a co-borrower on the mortgage loan.
Your initial application is designed to demonstrate that you have the financial stability to make mortgage payments. Whether you are applying to your local Michigan bank or anywhere else in the country, most applications will require the following information:
- Annual wages for the past two years, or if self-employed, your year-to-date profit and loss statement
- A recent paycheck from the last 30 days
- A list of all your financial accounts including bank statements and investments showing balances for the past 60 days
Copies of your complete and signed personal and business tax returns for the past year. You may have already provided some of these details during the pre-approval process but work with your lender to determine if additional support is needed.
At this point in the process, your lender should discuss current mortgage interest rates and any forecasted rate changes. You can ‘lock in’ an interest rate or, if rates are expected to drop, you can wait until you’re ready to bid on a house before finalizing.
Are you ready to take the first step toward buying a house? The Level One Bank mortgage team is ready to talk with you. Among the Top 10 Best Banks in Michigan, we truly make your search process easier with realtor recommendations and a free, no-obligation prequalification. When you find the house of your dreams in your price range, you’ll get responsive, thorough service and a mortgage loan that fits your budget.
Contact our team today and turn your dream of owning a house into a reality!
“Real estate cannot be lost or stolen nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
-Franklin Delano Roosevelt
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