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Understanding the Mortgage Process

Buying a home doesn’t have to be stressful.  After all, finding and moving into that special home should be one of the happiest moments of your life. If you know what to expect—and you have a knowledgeable team of real estate and mortgage-lending professionals to assist you—finding and financing your first home can be an exciting and rewarding experience. Here are the basics of what you need to know:

Before you even begin to shop, obtain a mortgage preliminary approval.  We recommend our Buyer Advantage preliminary approval! 1  We’ll need your most recent 2 years of W-2’s and tax returns, the last 30 days of pay stubs, and 2 months of bank statements.  Qualified borrowers will receive a mortgage commitment letter upfront, subject to an appraisal.  Some lenders only offer a pre-qualification letter, which doesn’t verify any of the information you provide.  A mortgage commitment letter, though, is an important first step and will help you determine how much home you may be able to purchase and can strengthen your bargaining position with sellers.

Once you are issued your preliminary approval, you’ll work with your real estate agent to find the right home. It helps to determine your needs and create a wish list of desirable features. While you visit homes, take notes to be able to determine which homes may warrant a second visit.

Once you find a home you like, you’ll make a purchase offer.  Your real estate agent will present your offer to the seller, who will then choose to accept, counter, or reject the offer.  When a price is settled on, you and the seller will sign a Purchase Agreement, defining the terms of the sale.

The next step will be to complete the loan application process. If you have already obtained a mortgage preliminary approval, contact your mortgage consultant and let them know you have a contract on a home. They will update your loan application and help you to proceed with the home financing process. If you were issued a Buyer Advantage preliminary approval, most of the work is already completed!

Next, the home will be appraised. An appraisal is a formal, written estimate of the home’s current market value. Your lender will review the appraisal and note any conditions that may be required prior to closing on the loan. You will be provided a copy of the appraisal.

Once any remaining conditions are submitted including the appraisal, title insurance and homeowners insurance, we will issue a final commitment and finalize the details of your closing with your real estate agent and your settlement agent.  Your closing documents will be prepared, and you will go to settlement.  Make sure you talk to your settlement agent about how you should prepare the funds needed for closing.  Today, a wire from your bank is the most popular way, but you may be able to provide a cashiers’ check or money order.

Congratulations, you become the proud owner of your new home!

We hope you have found this overview helpful; contact your local mortgage consultant for more details!


1. FM Lending Services Buyer Advantage is not a loan approval. A Commitment Letter is based on information and documentation provided by you and a review of your credit report. The interest rate and type of mortgage used to approve you for a specified loan amount is subject to change, which may also change the terms of approval. The interest rate cannot be locked until your offer to purchase a property has been accepted. If the interest rate used for credit approval has changed, you may need to re-qualify. Information provided by you is subject to review and all other loan conditions must be met. After you have chosen a home and your offer has been accepted, final loan approval will be contingent upon obtaining an acceptable appraisal and title commitment.  Additional documentation may be required.

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