THE MORTGAGE PROCESS – BUYING A HOME FROM A LENDING OFFICER’S PERSPECTIVE

The Mortgage Process

In this post we are going to cover how to begin the process of buying your first home as well as some different mortgage options available to you during this difficult time. I took the time to sit with Zell Railey, a Loan Officer with Weber Mortgage in the Birmingham, Alabama area to pick his brain about ways that first time homebuyers can make the homebuying process easier. This post is a great source of information for first time home buyers as Zell covers a lot of great topics and shares information that buyers need to be aware about. 

We will be discussing three main topics: the loan mortgage process, mortgage forbearance, and a service that Mortgage Weber provides for homebuyers: the concierge program. The mortgage process can seem daunting, so this article is a source of information to help guide you through the process. 

There is a lot to learn if you’re buying your first home! The process can seem intimidating, but that’s why it’s good to have a realtor and mortgage loan officer by your side that you trust to help you through the process. After you finish reading this article, click on this blog for more information that first time home buyers need to know.

Loan Process

In this section, we are going  to learn more about the loan process for your mortgage. Whether you’ve bought a house before or you’re a first time buyer, the mortgage loan process can be a little confusing! That’s why it’s so important to have a mortgage company who you trust on your side. 

There are a few steps to getting a home loan. After you find a realtor to help you find your home and find a lender to help you understand what you can afford, the first step is having your loan officer take a look at your credit report. Your credit report is different from your credit score since it shows whether or not you’re paying your bills on time, making any late payments, and also shows whether your credit cards are maxed out. Basically, the lender is looking to see if you have credit and if you manage it effectively. 

Once your credit report is cleared by your loan officer, they will send a pre approval letter for a specific amount that the buyer can afford. A pre approval letter is so important for buyers; it can help you be in a better position before putting in an offer on a home since sellers will know that you are pre approved to buy their home. Getting pre approved means you have purchasing power.

It’s important to get pre approved so that you can show the sellers you’re serious and able to buy their home, so you’re more likely to win a bidding war. You don’t want to put an offer on a home only to lose out because of not being pre approved. Talk to your realtor and mortgage company about what you need to do to put in a strong offer.

For the next step in the loan process, your loan officer will collect documents that prove what kind of income you’re making. These documents include W2s and pay stubs, and in certain cases taxes may be required. Once these documents are collected, your loan officer will send this information to the underwriter. The underwriters are the ones who actually approve the mortgage loan. Underwriters will make sure that everything matches and approve the funds for the homebuyers if everything looks good.

Once you have been pre approved for a home you can start looking for homes since you will know exactly what your budget is and what you can afford.. Your realtor will guide you through the process of sending in offers. Once an offer has been accepted and you are under contract, your mortgage lender requires that you have home insurance. Home insurance can sometimes be up to 20% of your monthly mortgage payment, so shop around for the best deal. 

Not only is home insurance needed, but a termite bond (especially since we’re in Alabama) and wood infestation reports (which are mandatory for government loans) are needed. The next factor is the appraisal of the home you are buying. The appraiser determines the value of the home and lenders are only allowed to lend a certain amount to the buyers based on the value of the home. The appraiser represents the lender, not the buyer or the seller, since they are putting the dollar value on the home.

Another factor in the loan process is which loan to choose and what your down payment should be. Not all down payments are 20%. Every loan is different, so it’s important to talk to your lender about the mortgage options that are right for you. 

Make a note that once you are under contract, your finances aren’t set until the home is officially  yours. One hiccup that can happen is losing finance right before closing on a home. Make sure you’re clear on what is and isn’t okay to do while you’re under contract for your home. You don’t want to lose your dream home over a simple mistake such as opening another credit card. Have a financial plan and stick to it until you own your new home and are able to make changes. 

For more information on how to buy a house, read this blog post.

We have a YouTube video you can watch where Zell talk through the mortgage process of buying a home: the first steps to getting pre approved for a loan, what documents and information are needed throughout the loan process, and what’s needed once you go under contract for a home. This is perfect information for first time homebuyers! 

If you’re wondering what the first steps are to buying a house, then you need to watch this video: https://youtu.be/KCdCPapqIbI 

Mortgage Forbearance

What is Forbearance and what does taking forbearance mean? This section of information will help you learn more about your mortgage options during this time.

Mortgage forbearance grants you a delay in your monthly mortgage payments for the short term, but these payments are not forgiveness, you will have to pay them back. Most times you can get mortgage forbearance for three months, but in some cases you may be able to delay payments for six months.

 Mortgage forbearance has always been an option, but this is becoming more well known due to COVID-19. Times may be difficult for some right now, and it’s always good to know your options. Mortgage forbearance may be a helpful option to you right now, or at sometime in the future. Talk to your lending officer about your options to know what’s best for your unique needs and to learn more about your forbearance options.

Learn more about mortgage forbearance in this video as I sit down with Zell Railey to discuss this topic on your mortgage payment options:

Concierge Program

In this section we are going to learn more about the mortgage concierge program that Weber Mortgage offers. Weber Mortgage offers this service to help speed up the buying process to fully qualify the borrower. 

If you’re trying to buy a home in a sellers market, or just wanting to ensure that you win the offer for your dream home, then this service will be of value to you! Weber Mortgage started their concierge program in 2011 to allow  homebuyers to be underwritten before they find a house to make an offer on.

Underwriters will go through the buyers’ pay stubs and fully qualify the buyers before they try to buy a home. This way there is no question that the potential buyers will be approved for the mortgage. For buyers this is a huge advantage because when they put an offer in on a home the buyers aren’t just preapproved, they are approved to buy through an underwriter, which is a stronger offer. So in a bidding war, a buyer that went through the concierge program will have a much higher chance of having their offer accepted.

Another advantage to the concierge program is that this service can speed up the homebuying process for sellers looking to sell quickly. Once there is an executed contract, all the buyers need to do is to get a home appraisal, termite inspection, and the title work done on the property. This means that there is the potential to close on a home in 2 – 3 weeks.

The concierge program that Weber Mortgage offers may be the right option for you, especially if you are looking to buy during a seller’s market. Listen to Zell as he explains the benefits of this service in this video:

Ready to buy a home?

If you have any questions about these mortgage topics, please feel free to reach out to Loan Officer Zell Railey, his contact information is below:

Here is Zell’s contact information:

Zell Railey

If you’re ready to start the process of buying your home, call Dianna Howell of The Howell Group at: 205-568-5435 or email her at: dianna.howell@kw.com

There was a lot of information in this article, and if you have any questions we do have more resources available to help you. It’s always great to have a lender and realtor by your side to help you through the homebuying process since there is so much to it. Another great source of information for beginning the process of buying a home is in another one of our blogs. This blog lists 6 great tips for buying a home.

Or you can check out this article that lists out some major points that first time buyers may not be aware of. There is a lot more to buying a house than just picking out the perfect one! Read about the most common things that most first time buyers don’t know here.

As always, please reach out if you have any questions or need more information! I would love to hear from you. First time homebuyers have a special place in my heart and I love guiding them through the process. Happy house hunting! 

~Dianna Howell