Navigating the Home Mortgage Loan Process: A Personal Account
The journey of buying a first home can be daunting, especially in a city like Los Angeles where housing prices are notoriously high. One couple, however, managed to navigate the process and secure a mortgage loan to purchase their dream home.
With a savings of $25,000 and confidence in their job stability, the couple cautiously began the mortgage loan pre-qualification process. After researching several mortgage lenders, they ultimately chose a company recommended by a realtor family friend. Their loan officer, Gian Ceretto, guided them through the different loan options and financial scenarios before settling on a Federal Housing Authority (FHA) loan.
The couple was approved for $480,000 with a 30-year fixed rate loan at 3.875 percent interest. Despite not having the coveted 20 percent down payment, they were able to cover the 3.5 percent down payment plus closing costs with their savings. The decision to go with an FHA loan, despite the added expense of private mortgage insurance (PMI), was based on the long-term appreciation of their home outweighing the PMI cost.
While sellers may prefer cash buyers or larger down payments, having an FHA or VA loan doesn’t necessarily disqualify buyers. The couple had no issues with their FHA loan when it came time to shop for a home, and within two days of pre-qualifying, they had put in an offer on a house.
The process of applying for a home loan involved providing proof of income and assets, consenting to a credit check, and receiving estimates for monthly payments and cash to close. While the couple was given the green light to house-hunt after getting pre-qualified, some buyers may need additional time to fix any financial issues before they can start shopping.
Ultimately, the couple’s story serves as a cautionary tale for prospective homebuyers, highlighting the importance of consulting with professionals and carefully considering financial circumstances before making significant decisions. Stay tuned to this series to follow the couple’s journey through the home buying process and find out where they eventually ended up.