WHAT IS THE MORTGAGE PROCESS?
Most of us cannot afford to pay cash for our homes and investments, or some of us may want to benefit from certain tax advantages that having a home owner’s mortgage may provide. Whatever the reasons we may have, there is a process to getting a mortgage approved for our residential or investment purchase. Hawaii Elite Real Estate is here to guide you through it, step by step.
Just as you wouldn’t go to the grocery store without some idea of what you want to purchase, you wouldn’t start looking for a house without knowing how much you can afford to spend. This is the first step in the mortgage process and it is called a Pre-Approval Letter. Your bank or lending institution will require some documents from you like your past two years of W-2s or tax returns if you are self-employed. Recent pay stubs are usually required as are recent bank statements and statements from any of your investment accounts.
Now that you know how much you can afford to spend, you can search for that dream home or investmet property. Once you find a property, make an offer on it and have that offer accepted, it is time to formally apply for a mortgage on that property. This is when you submit a Mortgage Application. The application is pretty self-explanatory and will include information about the property you wish to purchase, the terms of the loan you are applying for and your financial history.
Once the application is submitted you will receive a Loan Estimate. This document will show your estimated monthly payments and interest rate. It will also summarize all costs associated with the loan such as origination and recording fees.
After you receive the Loan Estimate, you will receive a Conditional Commitment Letter. This letter will specify what conditions you need to meet to close the deal. Usually this includes showing proof of homeowner’s insurance and having an appraisal done by a qualified firm.
The next step will be to submit all those financial documents you submitted to the lending institution for the Pre-Approval Letter to and individual call the underwriter. The underwriter is basically a sort of “financial judge and jury” who will determine whether or not you are likely to satisfy the mortgage you are applying for. If everything checks out, you’ve completed the conditions set forth in the Conditional Commitment Letter and the underwriter finds no misleading information or negative financial history or related criminal acts, your loan will be approved.
After that, all you need to do is pick up a certified check from the lending institution made out to the seller and attend the closing. Once you deliver payment to the seller and sign the necessary documents, you will be given the keys to your new home or property purchase!
Hawaii Elite Real Estate knows this process inside and out. We also know local professionals who are highly skilled and trained in providing these services to a discriminating clientele. Call us to day to begin your journey of discovering your very own dream home or investment property in Hawaii.