Congratulations! You’ve just cleared a major hurdle in the home buying process – your mortgage loan has been approved. But don’t pop the champagne just yet. There are still a few steps to take before you can officially call yourself a homeowner.
What to Expect After Your Mortgage Is Approved
1. Commitment Letter
Once your loan is approved, you’ll receive a commitment letter from your lender outlining the loan terms and your mortgage agreement. This document will include your monthly costs annual percentage rate, and any conditions that must be met before closing. Be sure to review this document carefully and sign it before the specified time.
2 Closing Disclosure
You will receive the Closing Disclosure, which lists all of the closing costs you will be responsible for paying, approximately three days prior to your closing date. This document should be compared to the Loan Estimate you were given when you applied for pre-approval. Before closing, make sure to check for any discrepancies and get your lender to explain them.
3. Closing Day
The closing will typically take place at the escrow agent or title company’s office. You’ll sign paperwork that indicates your acceptance of the mortgage loan terms, and the funds for the home purchase will be transferred once you’ve signed all the necessary documents.
4. Moving In
You will get the deed to your new house after the closing is finished, and you will be able to move in!
Tips for a Smooth Closing
- Be prepared. Make sure you have all the necessary documents, including your driver’s license, Social Security card, and proof of income.
- Ask questions. Don’t be afraid to ask your lender or closing agent any questions you have about the process.
- Bring a checkbook. You’ll likely need to pay some closing costs with a certified check.
- Relax and enjoy the moment. You’ve worked hard to get to this point, so take a moment to celebrate!
Additional Resources
- What Are the Steps in the Mortgage Process?
- The Do’s and Don’ts When Applying for a Mortgage
- How to Buy a House with No Money Down
Frequently Asked Questions
After my mortgage is approved, how long does it take to close on a house?
A: The closing process typically takes about 30-45 days after your mortgage is approved.
Q: What are closing costs?
A: Closing costs are the fees associated with buying a home, such as origination fees, appraisal fees, title search fees, and escrow fees.
Q: How much money do I need to bring to closing?
A: The amount of money you need to bring to closing will vary depending on your loan amount, closing costs, and down payment. Your lender will be able to provide you with an estimate of your closing costs.
Q: What happens if I can’t close on my house?
A: If you can’t close on your house for any reason, you may be able to work with your lender to reschedule the closing date. However, you may be responsible for paying additional fees.
Getting your mortgage approved is a big step in the home buying process. By following these tips and being prepared, you can ensure a smooth closing and be on your way to enjoying your new home.
Get pre-approved for a loan
Once you’ve estimated your own budget, you might start looking at homes within your price range. This is also when you take the first step toward getting a mortgage.
That first step in the mortgage loan process is to get a mortgage pre-approval letter from a lender. This letter outlines the maximum amount that you could borrow from a mortgage lender based on your income, savings, and credit.
You’ll want to do this before you make an offer on a house.
Since the seller requires substantial proof that you are eligible for a loan in order to purchase the home, most sellers and agents won’t even consider an offer unless the buyer is pre-approved.
Note: getting “prequalified” is different from getting a “mortgage preapproval.”
Both terms mean a lender is likely willing to loan you a certain amount of money. But Realtors generally prefer a preapproval letter over a prequalification letter.
That’s because prequalification letters are not verified. They’re just an estimate of your budget based on a few questions. In contrast, a pre-approval letter has been verified by checking your bank statements, W2s, credit report, and other records. It’s an actual offer from a mortgage company to lend to you — not just an estimate.
When you obtain your final mortgage, you are not obligated to continue with the lender you used for pre-approval. You can always choose a different lender if you find a better deal.
Complete a full mortgage application
After selecting a lender, the next step is to complete a full mortgage loan application.
Most of this application process was completed during the pre-approval stage. But a few additional documents will now be needed to get a loan file through underwriting.
For instance, the fully executed Purchase Agreement and documentation of your earnest money deposit will be required by your lender.
Additionally, your lender might ask for updated records of your assets, liabilities, and income, like pay stubs and bank account statements. If you’re self-employed, this process will be more complicated. You may need to show tax returns.
You must provide your lender with supporting documentation if you receive income from Social Security or a long-term disability policy.
Your debt-to-income ratio will be ascertained through this process, assisting lenders in determining whether you can afford the monthly payments on the new loan.
Within three business days, you will receive a Loan Estimate that includes a detailed breakdown of the rates, fees, and terms of the house loan that you are being offered.