Mortgage And Refinance

Mortgages and Refinance: For many people, buying a house is the largest financial transaction that they will experience in their lives. With homes costing hundreds of thousands of dollars, these transactions could not take place without lenders who provide mortgages to the buyer. In addition, many homeowners refinance their home after owning it for a few years. There are two reasons to do this:

• To save money if the interest rate has dropped significantly since the original mortgage
• To get cash for other uses, such as a home improvement project.

The steps to getting a mortgage

1. Find out how large a mortgage you can afford. Your realtor can help you with this.
2. Find a house you want to buy that you can afford.
3. Make an offer on the house and come to agreement with the seller.
4. Get rate quotes from multiple lenders.
5. Apply with at least 2 lenders (this protects you in case one says no even though you can afford the house).
6. Complete all the inspections required by the lender (e.g. home inspection, pest inspection, lead paint inspection, ...)
7. Obtain all insurance documents required by the lender (e.g. title insurance and home insurance)
8. Obtain any other paperwork required by the lender
9. Wait for the commitment letter from the lender (if you get more than one, you get to choose the best one)
10. Show up at the closing with all the documents required by the lender - this may include a check for closing costs.
11. Spend up to 2 hours at the closing signing dozens of different documents.

Use your realtor to help you with this process. Realtors typically keep a checklist of things that need to be done. Your realtor has probably been through dozens of closings, and they understand the process really well.

If you are looking to refinance your house, the process is much simpler. The basic steps remain the same, but refinancing an owner occupied house requires a bit less paperwork. For example, you probably already have title insurance and home insurance.

For more information on mortgages, refinancing your house, or home equity loans, please see the articles below.