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How to Get a Mortgage: Step-by-Step Guide to Mortgage Loans

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Now that you’ve looked into different mortgage options, what comes next? Here is a step-by-step outline for how to navigate the next phase of your path to homeownership.  

How to Qualify for a Mortgage:

  1. Strengthen your credit. Your credit score informs mortgage companies how likely you are to follow through with payments in a timely manner. If you have a low credit score, you will most likely have to pay higher interest rates. Making payments on time and cutting back on credit card spending will greatly improve your credit score over time. It is a good idea to look over your credit reports several months before putting in an application for a loan. You will be able to see from those reports what most impacts your score, and you will be able to make the necessary adjustments to your finances from there. Taking the time to review and improve your score before applying for a mortgage will help you get a lower interest rate on your loan. 
  2. What to budget. Part of improving your credit score is adjusting your budget and knowing where to cut back on spending. This can be one of the most difficult parts of the process, since it requires a change in habits and a new financial mindset. Understanding your budget can also help you determine whether now is the right time to buy, or if you and your household would be better served in renting for a time, or even exploring rent-to-own home options. Even if that is the conclusion you come to, you can still set goals and determine which path to homeownership you think works best for you. 
  3. Choose the right mortgage program for you. After improving your credit and knowing where you stand with your budget and what you are able to afford, the next step is figuring out which mortgage program is the best for you. You will want to compare interest rates and look into different lenders’ terms to determine the best path forward. 
  4. Find a mortgage lender. Once you have found a type of mortgage that you think works best for you, the time comes for you to find the best lender. Even if the first lender you come to seems to have a great, low interest rate, it is wise to look around and compare lenders for the best overall deal. Pay special attention to fees and any other conditions they might place in contracts. Feel free to ask for referrals from friends and family as well. It is well worth your time and energy to research thoroughly at all the options.  
  5. Submit your loan application. You are ready to submit a loan application if you have already found a home you are interested in buying. This can be done online, or if you prefer, you can speak with a loan officer in person or by phone to complete the application. You will be asked to send in several key documents and provide information on various things, such as tax returns, proof of income, commissions, Social Security, financial statements from your banks, other assets, and recent employment history to ensure that you are a good match for their program and are creditworthy.  
  6. Begin the underwriting process. Whether you are pre-approved or not, you will still need to go through the lender’s underwriting department for financing. This department will take a look at your application and the documents you provided to determine whether you are a trustworthy borrower. They will also determine the amount for the loan and what it will cost during this process.  
  7. Get pre-approved. Getting pre-approved for a mortgage provides an advantage for home buyers as well. After you have done your research to find the best match for a lender that is right for you, it is wise to get pre-approved, or certified, for a mortgage. Gaining this pre-approval is further proof of your creditworthiness from lenders and makes things easier for you to move forward in the mortgage and home buying process.  
  8. Close on your new home! Once you get pre-approved and your loan application is accepted, you are nearly there. The next step in the process is completing the closing. This is when you will have to pay closing costs and where your mortgage funds come in. Be sure to consider all of the various fees that come with closing costs. The final step is when the closing agent gives the new homeowners and the sellers a statement with details about the transaction and enters the home purchase into public records and hands you the deed.  

Pathway Homes Can Get You There

If you know you are not ready for a mortgage today, Pathway Homes offers programs, such as rent to own home programs, to help you get there. Our programs offer a way for prospective homeowners to find their new home now, no matter what their financial situation might be. We are dedicated to working with our customers to find them the best deals that align with their financial and home buying goals.  

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