The process of loan application is usually hectic. Particularly when you’re taking into consideration a loan that could last for quite some time of your life, the accuracy of information, proper analysis of all the budget constraints now and in the years to come must be taken care of. Firstly, in this process, it is important for one to get hold of a copy of their credit report and make sure there are no errors in it. Incorrect information can lead to cancellation of the loan or lenders charging higher interest. On the basis of the affordability, down payment size, one can choose the type of mortgage loan required and a plan to suit their needs. You can get an FHA loan approval if you are a first time home buyer as it will help bring down your down payment percentage.
The market value of the house is determined, and when the application for mortgage loan completes, the borrower will have to provide lots of information which include his bank information, investment statements, proof of employment and few other documents. It would be a good idea to assemble all this information earlier to have a hassle free process. At the end of this, the lender decides whether to approve the application or not and if denied, the borrower is supposed to receive a statement in writing as to the reason for the rejection of a request from the lender.
You will have to provide proof of your ability to pay which plays a crucial role in the approval of your loan application. A wide range of documents will be checked for this purpose including financial statements, tax forms, employment history, etc.
The final step of this procedure is the closing process which involves all the people who were present and might be needed in the future concerning this loan. All the necessary papers are signed, and the deal is finalized. The ownership of the property is transferred legally to the buyer. The borrower would have to sign numerous documents during the closing procedure which include HUD-1 settlement statement, mortgage note, the truth-in-lending statement and quite a few other documents post which the application process ends and the borrower avails the mortgage loan.