Preparing to own a home can be a stressful, exciting next step in your life, and here at Queensborough National Bank and Trust, we strive to make this process as simple and easy as possible. Understanding the steps to homeownership cannot be underestimated, and our Queensborough Mortgage team looks forward to aiding you with any questions that you may have about the process.

The First Steps

1. Pre-Qualification – Informally determines the maximum amount you are eligible to borrow.
2. Pre-Approval – Similar to pre-qualification, but debt, income, and credit are verified, and you are approved for a loan for a certain amount and under certain terms and conditions.
3. The Hunt – Now that you know your budget, you can now start shopping for your new home. Ask your Real Estate agent for help finding homes meeting your criteria.
4. Purchase and Sale Agreement – When you find the right home, your agent will draft an offer that includes the terms of sale, repair requests, move in date, and other items. Your pre-approval letter, if applicable, will typically be submitted with your offer
5. Loan Application – When the offer for your new home gets accepted, you need to obtain your mortgage. If you are not pre-approved, you need to complete a loan application.
6. Documentation – Paperwork supporting your loan application must be submitted at this time, this includes pay stubs, tax returns, and account information. If you are pre-approved, you have completed this step.

These steps are the gateway into owning your new home. Pre-approval can be an extremely helpful process, and for more information on the process, look here.

Review Process

1. Appraisal – Lenders will require an appraisal on all home sales.
2. Title search – At this point, either the seller or buyer will conduct a title search for liens against the property, and these must be settled before the transfer of property.
3. Property Inspection – Loans require an inspection for water or termite damage, as well as any safety hazards that may be visible. These issues may need to be resolved before the property transfer.
4. Processors review – Loan processor will package all pertinent information and send it to the underwriter.
5. Underwriters review – Based on information put together by loan representatives and processors, the underwriter makes the final loan approval decision.
6. Mortgage Insurance – Many lenders require borrowers to have private mortgage insurance when down payments are less than 20 percent of the home’s sale price. 

The Final Steps

1. Final Loan Approval – When debt to income ratio is good, your loan will be approved in most cases. In some cases, more money down may be needed to improve the ratio. If the property appraises for less than the purchase price, you may need to increase the down payment to cover the difference.
2. Insurance – Lenders require you to have fire and hazard insurance on the replacement value of the structure. Other types of insurance may be required depending on disaster activity in your area.
3. Signing – Final loan and escrow documents are signed by the buyer (you) and the seller.
4. Funding – A wire transfer or check for the loan amount will be sent to the title company.
5. Close of Escrow/Closing – Title transfer documents are recorded by the County Recorder.
6. Confirmation of Recording – The title company will authorize the escrow company to send a check to the seller.
7. Move In – It is now time for you to move into your new home. Be sure to replace all locks for safety in your home.

At Queensborough National Bank & Trust, we strive to make any banking decision that you make as simple and easy as possible, while building lasting relationships all throughout the process. Our Queensborough Mortgage Team is here to assist you with any questions that you may have about this process.

FAQ’s:

1. How do I know how much house I can afford?
   1. Generally speaking, you can purchase a home with a value of two or three times your annual household income
2. How do I know what kind of mortgage is best for me?
   1. There is no simple formula to determine the type of mortgage that is best for you. This choice depends on several factors, including your current financial picture and how long you intend to keep your house. 
3. What is the Difference in a fixed rate loan and an adjustable-rate loan (ARM)?
   1. With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. 

NMLS: 736995