We understand that the thought of a home purchase or loan refinance process can seem daunting. GoPrime Montana prides itself on being your local Montana lender that takes the time to get to know you and your individual needs, but it’s also wise to start the journey as educated and prepared as possible.
There are two journeys through the mortgage process, a purchase mortgage and a refinance. You can have a purchase mortgage without a refinance, but not the other way around. The milestones in each process are similar, but it’s important to understand the differences between the two.
A homebuyer has many different loan options when looking to secure a mortgage. We are proud to offer a wide variety of home loans so we can pair you with the one that fits your personal goals.
A refinance replaces your current home loan with a new one that pays off your original debt. If rates drop or your credit score improves it could be a smart idea to refinance. This can give you the opportunity to invest in home repairs or improvements, eliminate mortgage insurance premiums, or consolidate your debts.
Whether you’re looking to empower yourself by becoming a homeowner or looking to change the terms of your current loan, these are the milestones you should prepare for during the process.
Before You Apply
A smart way to start the mortgage process is to apply to get pre-approved. This step enables you to move as quickly as possible through the milestones when you find the right house for you.
A pre-approval includes reviewing your paystubs, tax returns, bank statements, and credit. This important step takes an in-depth look at your financial situation and gives a definitive answer to your financial well-being before you start house-hunting and gives you a clearer idea of your budget when house shopping.
Another crucial step to take before starting on your journey home is building yourself a strong and dependable team. Finding a real estate agent to help you narrow down your choices with honesty and integrity is essential. Partnering with a local Montana lender who knows the market and has experience in the industry ensures that you are working with a team that will walk with you through each milestone and be sure you know what to expect next.
What are the mortgage milestones?
Submit your Application
Once you have formed a trustworthy and reliable team, received a pre-approval, set a budget, and found a house you’re interested in purchasing it is time to submit your application.
If your offer is accepted, you will receive an initial disclosure package and begin the application process. Keep in mind that once you submit your application, there are a few important things to avoid that may present issues (this applies to both purchases and refinances):
- Large Purchases: It’s wise to wait until after closing to buy furniture or a new car.
- Significant Life Changes: If you are considering a new job, an extended vacation, or a change in marital status, speak with your loan officer first to discuss how it may affect your loan.
- Opening a New Line of Credit: While opening a new credit card for your future home purchases may be enticing, it could lower your credit score and delay your closing.
- Random Bank Account Deposits (especially those in cash!): Deposits must be documented appropriately to prove that they are not borrowed funds.
- Late Payments: Even after your credit is pulled, be sure to continue to make all your payments on time, as your credit will likely be rechecked later in the process.
Once your application is received, a formal property appraisal is conducted to assure you and your loan officer of your home’s value. The appraiser will look at nearby recently sold properties with comparable size, room count, style, and condition.
During this milestone, the appraiser will primarily be looking at the overall scope of the home and the market for similar properties in the area. When purchasing a home, they may note any structural or condition issues, but this does not replace a home inspection. Be sure to work with a professional and certified home inspector before moving forward with a purchase loan.
Once you hit this milestone, your application will be sent to our processing team, which will order reports, review the guidelines, and double-check all documents for accuracy. Their goal is to be sure that everything is prepared for the underwriter to move the process along quickly. As a reminder, your income, accounts, and credit are still being checked, and any surprises (as noted above) can potentially slow things down.
If you are purchasing a home, this is also an excellent milestone to obtain a final quote on homeowner’s insurance, which provides you with financial protection in the event of a disaster or accident involving your home.
The next milestone in the mortgage process is underwriting. Our underwriters will evaluate the documents submitted, double-check the loan guidelines, and issue an approval if all is in order. Sometimes, our underwriters may require more documentation or clarification to meet the loan program rules. It’s possible that the underwriters may approve your loans with conditions, which means a couple more steps are needed before obtaining a total mortgage commitment.
Don’t be concerned if you receive conditional approval. It basically means that something additional must happen. Some of these responsibilities are up to the loan officer, and some will occur naturally as the loan progresses through the milestones. Your loan officer will contact you directly if they need anything further.
Here are some things you can tackle in the meantime:
- Identify any new utility companies that you will need to set up, like power, internet, water, and trash.
- Continue to avoid the aforementioned red flags that may delay the closing.
- Keep all financial documents available – even the new ones – and don’t shred or delete anything.
Clear to Close
The three most exciting words are here in the final milestone of the mortgage process: Clear to Close! Your mortgage has been fully approved and your final documents are ready to be prepared. Your loan officer will be in touch with the final schedule – meanwhile, pick out your favorite pen and get ready to sign those documents and move in!
We understand that this may seem like a long process with a lot of milestones to hit, which is why it is so important to partner with a company like GoPrime Montana that pairs you with a knowledgeable, experienced, local Montana lender that will walk with you every step of the way on your journey home.
Don’t forget that we offer many mortgage programs tailored to assist you and provide personal, individualized support to be sure we find the right loan for you.
Meet your local Montana loan officer and reach out today!