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- Debts, such as credit cards and student loans
- Income and work history
- Assets like stocks, bank accounts, and retirement funds
- The down payment you expect to pay and where the funds are coming from (like savings, inheritance, or a gift)
- The kind of home you are buying
After you have submitted the loan application, you will get a loan estimate, which is a document that details all the estimated costs of the loan you applied for. To allow borrowers to compare offers, lenders quote these costs upfront. Most of the time, you will get the loan estimate within three days of applying or, in certain cases, at the time of application.
3. Loan processing and underwriting
During this step in the process, lenders and underwriters assess your financial information (which is occasionally called your risk profile) to determine how much of a mortgage you can take on financially and repay on time.
To arrive at a decision about loaning you a mortgage, the lender will evaluate your information through a software program, manually, or both. At this point, the lender can deny or approve the loan, or potentially request further information. The latter request is not uncommon, so don’t fret.
4. Closing
After your application has been approved and underwriting is finished, you will receive a final commitment letter for the home loan. The last step is closing. During this step, you sign paperwork saying you agree to the terms of the loan and the transfer of the property. Perhaps most satisfyingly, you also get the keys to your new home.
However, you will also be responsible for paying closing costs, including the origination fee, if your lender charges one. Other fees may include an underwriting fee or documentation preparation fee, as well as attorney and title insurance fees.
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