The home loan process

9 steps to close: What to expect from the homebuying process

Appraisals. Escrow. Titles. Whew! Mortgage terms can be confusing, especially since most of us aren't buying and selling homes every day. The good news is you'll have your own guide throughout the home loan process - your KeyBank mortgage loan officer will walk you through every step of the way.

To understand how the mortgage process works, here are the 9 basic steps toward buying a home. Keep in mind, these steps can vary state-to-state.

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Step 1: Getting pre-qualified for a mortgage

This is an easy way to obtain early assurance that you meet the necessary credit requirements for a specific home loan amount. With the pre-qualification letter in hand, you will know how much you can afford. Not only will this tell you how much you can spend, but getting pre-qualification helps show sellers you are a serious buyer.

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Step 2: Deciding on a down payment

Determining the amount of money you plan to use for your down payment can also help you decide how much home you can afford during the mortgage loan process. KeyBank offers a variety of low down payment options. For example, first-time homebuyers may be eligible for the Key Community Mortgage.

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Step 3: Locking in a mortgage rate

Mortgage loan rates may change daily. To ensure that you receive the rate you were quoted, you may elect to lock in your rate by paying an upfront authorization fee. Note: There is no upfront fee for locking in a rate unless the lock period is more than 90 days.

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Step 4: Applying for a home loan

The mortgage loan application form asks for detailed information about you, the property you wish to buy, and requires documentation about your personal finances. During the application process, the lender will provide a Loan Estimate (LE) outlining the closing costs for the loan. By law, the lender is required to have you review and approve of the LE before they can proceed with your application.

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Step 5: Mortgage loan processing and appraisals

During this step in the mortgage process, the lender will collect the information needed to process your loan. Your property will be appraised to determine its value. The appraiser will visit the home and will also consider sale prices of comparable houses in the neighborhood.

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Step 6: Receiving a home loan approval

The lender will review the completed application and verify information included to make a credit decision on the application. As part of this process, the lender will review your credit report and other financial details to evaluate the risk of lending money.

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Step 7: Preparing escrow and title documents

Also known as pre-closing, at this point a title company, or designated attorney, will hold any funds and documents until all conditions of the mortgage approval are met. Title work will be prepared, including a title exam, to ensure the title to the property is clear. Other documents such as the Mortgage Note and Deed will be prepared.

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Step 8: Closing and signing final paperwork

The home loan documents will be sent to a title company or attorney's office for the buyer and seller to sign. Any additional down payment and closing costs will be due at this time. Closing costs normally include appraisal fees, title exam, settlement fees, title insurance, credit report fees and application fees.

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Step 9: Title transfer - time for the keys!

When all funds are collected and the contract has been verified, the title is transferred and the purchase price funds are disbursed (given) to the seller. After the title is transferred, you're a homeowner - congratulations! You can take over the keys to your new home.

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