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Are you looking at buying a new home in Des Moines? If so, you’ll likely need to take out a mortgage loan. Homebuying can be an intimidating process, especially if it’s your first time... so you may be wondering what steps are involved in the mortgage process. Don’t worry! We’ve broken it down into an easy-to-follow guide so that you can get your dream home without breaking a sweat:
First Steps Before Applying for Your Mortgage
Before you even start considering applying for a mortgage loan, there are some basic things you should do. First and foremost, take a look at your credit score to make sure that it is where it needs to be. Generally speaking, lenders prefer working with borrowers who have scores of at least 620 or higher. It’s also wise to start saving up money quickly so that you have enough cash on hand for your down payment and closing costs associated with purchasing a house. Next, speak with a few lenders (or just one lender if they offer multiple options) and determine which loan products are available in Des Moines and which ones best fit your financial situation. This is also the perfect opportunity to ask questions about interest rates and loan terms, so don’t hesitate to ask away. Once you’ve selected the right lender for you, it’s time to go to the next step in the process: applying for your loan.
Applying For Your Mortgage Loan
When applying for your mortgage loan, be sure to have all the necessary documentation handy. The lender will need proof of income and other financial records such as tax returns, W2 forms, or bank account statements. You’ll also need proof of employment, like an offer letter or pay stubs from your current employer(s). Last but not least is your credit report; having this handy will help speed up the application process significantly, since lenders will use this information when assessing your risk level and determining interest rates. This part of the process usually takes 2-4 weeks, depending on how long it takes for your lender to assess all the paperwork you’ve provided. Once everything is approved, you’ll receive a commitment letter from the lender outlining the interest rate, the repayment schedule, and all the other terms and conditions of the loan. Then comes the last step: closing day.
Closing Day and Moving In
On closing day (also known as settlement day), both the home buyers and the sellers meet at a bank or attorney’s office, where the final documents related to the sale of the property are signed off by both parties and any other people involved (like the real estate agents). After signing all the paperwork and paying any applicable fees, title transfer will occur — meaning ownership has officially been transferred from seller to buyer. Congratulations! Now comes the most enjoyable and rewarding part of the whole process: moving into your new home.
Getting a mortgage loan doesn’t need to be daunting or overwhelming; this step-by-step explanation will help you feel confident knowing that you are prepared for each stage in the process. Best wishes on finding your dream home in Iowa’s capital city.