Bank of America Home Loan Guide: Types of Mortgages, How to Apply

start exploring

To your own home using this route

If you're purchasing a home for the first time, this book will walk you through the process of making one of the most significant purchases of your life.

1. Get your finances in order

Determine what you can actually afford before starting your property search. Analyze your earnings, debt, savings, and other financial commitments. To determine the property price and monthly payments that might fit within your budget, utilise a mortgage calculator.

Compare your debt to income and check your credit score. A decent general guideline is to keep your monthly debt payments under 36% of your gross monthly income. You ought to be able to afford to make your monthly mortgage payment in full, including taxes and insurance.

2. Determine your loan eligibility

Meeting with a lender to go over loan possibilities and present interest rates is the next step. The maximum amount the lender is ready to lend you via a mortgage will be stated in a prequalification letter that the lender can give you.

Obtaining pre-approval for just a mortgage, which is a offer to lend you a particular amount that is valid for a specific period of time, typically 90 days, may also be something you want to think about. 

3. Speak with a realtor

Save time and effort by focusing your search on properties that meet your financial requirements after you know what you eligible for. Try to look at properties online, and ask your real estate agent to just show you listings that fit your requirements and price range.

A purchase contract is created if the offer is accepted, and it normally includes a good-faith deposit (sometimes known as "earnest money") to demonstrate your commitment. This deposit is often around 1 % and 3 % of the sale price.

4. Secure your mortgage

It's time to submit a mortgage application when an offer is approved. You normally have between 45 and 60 days to complete your purchase agreement, so you must move quickly to lock in your interest rate and give your lender time to request a house evaluation.

5. Make ready to close

You will get a closing disclosure after your mortgage is authorised and at least 3 business days ahead you close. It outlines the costs you must pay, which usually account for two to five percent of the cost of the home. 

Read it carefully, and if anything seems odd, let your lender know. Bring the ID and any closing-day payments after that. If there is a cosigner for your mortgage, they must be present.

The monies are sent to the seller, you receive the keys, and the house is yours until the loan closes, which could take a few days.

More about home-buying process

Click Here to continue