A Step-By-Step Guide On How To Get A Mortgage

Are you considering purchasing a new home? Do you need to apply for financing but are unsure where or how to start? Fortunately, this expert guide from Trio Capital will help! Read on for step-by-step instructions on how to get a mortgage! 

Before applying to get approved for financing, you must do some preliminary preparations. Improving your credit score and saving for potential housing costs are two key things you can do to help you get approved for home loans in Philadelphia.

First, you need to request a copy of your credit score from a legitimate source. If you are contemplating using a jumbo mortgage loan to buy your luxury home, you might face stringent requirements, such as having a minimum credit score of 700, a low debt-to-income ratio, and a higher down payment. If your credit score is under this threshold, you need to work to bring it up to the minimum of 700 by paying down debt, disputing any negative information, not opening or closing any accounts, and improving your debt-to-income ratio. 

Buying a home is a massive endeavor, and there are many costs that you need to consider, from upfront fees to ongoing expenses. Before you apply for financing or start researching homes, you need to start building your savings. 

Consider opening a savings account that is designated exclusively for housing costs and fees. Whether buying a first home or a vacation property, you must save at least 20% of the home's purchase cost. Furthermore, many mortgage lenders in Philadelphia like to see that you have at least six months of monthly mortgage payments in your savings. You can also expect to pay around 6% of closing fees, which include home inspections, home appraisals, and loan fees. 

In addition, you have to save for property insurance, homeowners association fees, and property taxes. There are also costs associated with moving from your current residence to the new home that you need to factor in. In short, by setting aside a considerable amount in reserve savings, you can be better prepared financially to cover all the fees you are expected to cover, whether you are buying a first home or an investment property.  

Once you have improved your credit score and have a savings reserve fund, it is time to begin researching mortgages. Many different mortgages cater to different needs, depending on your purpose. For example, consider applying for a Rental Loan if you plan on buying or refinancing the rental property. For those who wish to flip properties, consider Fix & Flip Loans as your best option. As for those who are starting a new business and require property, there are commercial business loans available. Consult Trio Capital, the premier Philadelphia mortgage company, to find a loan program that works best for your needs!

After choosing the right mortgage that is best geared for your needs, you can apply to get pre-approved! By getting pre-approved for a mortgage loan, you will know how much money mortgage lenders are willing to lend you – and ultimately, what price range of homes to begin searching for. Furthermore, pre-approval can speed up the overall real estate transaction, as sellers are more likely to trust that it won’t fall through due to financial or other personal reasons.  

Once you receive a letter of pre-approval from the lending institution, it is time to start searching for homes! Consult your real estate agent, who will help you with important resources, such as the Multiple Listing Service (MLS), to find a home that aligns with your must-haves and want-to-haves.

Once you find a potential property, your real estate agent can do a Comparative Market Analysis (CMA) to gather sales details on the home and other similarly priced homes. Consider also how long the home has been on the market, as that can determine how much the seller is willing to negotiate. For example, if the home has been newly listed, the seller may be less likely to negotiate a lower price at first. Knowing the home's condition, how it compares to other similar homes, and your budget can help you determine what kind of offer to make on your home.

Once an offer has been made, your mortgage lender will now work behind the scenes to make sure that you are a qualified candidate for a home or commercial loan in Philadelphia. During this stage, the mortgage lender will verify details, such as income, income-to-debt ratio, and savings. They might also check the condition of the home and the history of the home’s title. By verifying these details, the mortgage lender will ensure the home is valued correctly and that the loan goes toward a responsible person who can be relied upon to make consistent payments.

If you’ve reached this last step, congratulations! You are now ready to buy a home or investment property! During the closing stage, you can request that a home inspection be done to ensure that the home is in excellent condition and satisfies all codes. Furthermore, you will do a final home walk-through to ensure everything is in working order. The final step in the closing process is to sign the mortgage loan documents to collect and distribute the funds to the appropriate persons. The seller will also submit the property deed in your name, and you will be expected to pay at least half of the deed transfer tax. After paying the closing costs and receiving the keys, you are now the proud owner of the home or investment property!

Interested in applying for a mortgage to buy a home? Then, schedule a consultation with the knowledgeable team at Trio Capital, who can provide expert guidance on the different financing options available so that you can buy your dream home. By creating strong relationships with customers and operating with integrity and transparency, they will always find the right financial solution for your real estate needs! Reach out today.