Understanding the Mortgage Process: From Pre-qualification to Closing

There is a lot to consider when buying a home. Having a general understanding of the process may help you feel more prepared, more at ease. First Citizens Mortgage Bankers are always available to answer your questions and guide you through each step.

1. Prequalification — Before you get excited about certain homes and price ranges, start by contacting a First Citizens Mortgage Banker to find out how much home you can afford. How much home you can afford generally depends on the following:

Your income — How much you earn through your job and other sources of income

Your debt and credit — How much do you owe and how reliably do you make your payments

Your assets — Your savings, and how much you plan to use as a down payment, if any

2. Finding the Right Home — Work with a real estate agent to find the home that is right for you, where you want to live. Things to consider include whether you want a new home, a pre-existing home, or if you want to build; proximity to your work or to places you enjoy; school districts, and other factors. You should have your requirements ready to help determine if a particular house meets your needs.

3. Making The Offer — Once you find the home you want, work with your real estate agent to develop your offer. Your agent will find comparable homes in the area to help you calculate the right number. Make sure your offer leaves you enough money to make necessary improvements to the home, if needed, and that the expected payment is within your ability to repay.

4. Mortgage Application — Once you have an accepted offer, it’s time to apply for the mortgage loan. You can meet with your First Citizens Mortgage Banker or apply online. We can help you determine which mortgage product is the best fit for you and your overall financial goals. As part of this process, we’ll discuss interest rates and review the documentation needed to confirm your income and assets. You may want to review the information and documentation typically needed to buy a home.

5. Home Appraisals and Inspections — A few steps happen at this point: Your First Citizens Mortgage Banker will order an appraisal to verify the home's value and also request the title search. You are encouraged to schedule your home inspection as well. Home inspections are optional, but provide you with a detailed evaluation of the house, including the soundness of the roof, electric, plumbing and air conditioning and heating systems. Inspections help you understand the condition of the house, and can alert you of any major issues that may need to be repaired prior to the sale.

6. Mortgage Review — During this time, we will review the documentation you provided to support your income, assets and other details in a step called underwriting. If anything is missing, we will notify you. Once the underwriter finishes and the home appraises at a value that supports the sale price, we can approve your loan. While this is happening, you should also work to secure homeowners insurance. Proof of insurance will be required prior to closing.

7. Closing — Closing generally includes a closing attorney and the realtor Prior to closing, you will have the opportunity to review a closing statement, which details out the costs of the mortgage, what you are expected to pay at closing, necessary closing costs, and how much your monthly payment will be, among other things. At closing, you will also need to bring identification, such as a driver's license, to present to the title company or attorney managing the closing. You will sign several documents, but at the end, congratulations! You will be a homeowner, and the last thing you will get are the keys to your new home.