What are the steps involved with getting a home loan in Washington State? As a home buyer, how do I even begin the mortgage process?
These are frequently asked questions among home buyers in Washington State, particularly those who are buying their first house. This brief tutorial will walk you through the process in step-by-step fashion.
Getting a Home Loan in Washington State: 7 Steps
The mortgage process can seem overwhelming at first, if you’ve never been through it before. The good news is that it’s a fairly straightforward process. Once you understand the steps that are involved, you’ll have a much easier time navigating the path.
While every lending scenario is different, most borrowers will go through the following steps when getting a home loan in Washington State:
1. Start saving for your home-buying expenses.
As a home buyer, you will likely incur some out-of-pocket expenses when buying a house. The down payment is usually the biggest expense. Down payments range from 3% to 20% of the purchase price, in most cases. Military members who are eligible for a VA loan could buy a home with nothing down. You might have to pay closing costs as well, which can add up to thousands of dollars. The point is, you can improve your chance for success by saving money. The sooner you start, the better.
2. Create a monthly housing budget.
It’s a good idea to create a basic home buying budget for yourself, before you start house hunting. The goal here is to determine how much you can realistically (and comfortably) afford to pay each month in housing costs. Fortunately, the math is pretty simple. For starters, you’ll want to add up all of your recurring monthly expenses, and subtract that number from your net monthly income or “take-home” pay. Here’s an article that walks you through the process in more detail.
3. Get pre-approved for a loan.
This is the next logical step when getting a home loan in Washington State, and for a couple of reasons. Mortgage pre-approval is when a lender examines your finances and credit history to determine how much they are willing to lend you. There are several benefits to this process. For one thing, you’ll be able to narrow down the market based on your financing. Additionally, and more importantly, sellers will be more inclined to accept your offer. Learn more about pre-approval, or contact us to begin the process.
4. Submit a loan application.
The mortgage application is another required step to getting a home loan in Washington State. There is a standardized form used for this purpose. It’s called the Uniform Residential Loan Application. To complete the application, you’ll need to provide information relating to your employment, income, property information and more. Do a Google search for “Fannie Mae form 1003,” if you’d like to see a sample loan application.
5. Gather up your documents.
Getting a home loan in Washington State requires paperwork, and lots of it. When you apply for a loan, you will be asked for tax returns from the last two years, w-2 forms, bank statements, pay stubs, and other finance-related documents. Lenders use these documents to verify the information provided on your loan application. They also use them to ensure you have the financial ability to repay your loan.
6. Start looking for a home.
You’re eager to get out there and shop for a home. That’s understandable. But you’ll notice there are several preliminary step before this one. When you’ve been pre-approved for a certain amount, you can then shop confidently within that price range. Otherwise, you might end up wasting time by viewing homes that exceed your budget. There is a logical sequence of events when getting a home loan in Washington State. Get a budget on paper. Get your financing lined up. And then start shopping for a home.
7. Close the deal.
Once you’ve made an offer on a home, and cleared the mortgage underwriting process, you’ll be “clear to close.” This means the loan can be funded and the deal can be closed (following a lot of signatures, of course). Closing, or “settlement,” is the final step in the process when getting a home loan in Washington State.
Learn more: This article focuses on the mortgage process in particular, which is just one aspect of the home buying process. We’ve created a separate and related guide that explains the buying process in 11 steps.
Ready to Get Started?
Sammamish Mortgage is a full-service mortgage company based in Bellevue, Washington. We are a family-owned company offering a wide variety of loan products, highly competitive rates, and proactive customer service.
If you’re in the market for a mortgage loan but aren’t sure where to start, please contact our knowledgeable staff. We can help you choose the right type of loan based on your financial goals.