Getting pre-approved is an exciting milestone. You know roughly what you can borrow, and sellers will take your offers seriously. But a pre-approval is the starting line, not the finish. Here is what typically happens next, so you know what to expect at each stage.
With your pre-approval in hand, you and your real estate agent can focus on homes that fit your budget. Remember that the amount you are approved for is a maximum, not a target. Many buyers choose to shop a little below that number to keep their monthly payment comfortable. Our mortgage calculator can help you see how different prices affect your payment.
When you find the right home, your agent will help you write an offer, including the price, earnest money deposit, contingencies and closing date. The seller may accept, reject or counter. Once you agree on terms and sign, you are under contract.
Now your loan officer moves from pre-approval to a full application tied to the specific property. Expect to provide updated pay stubs, bank statements and any other documents requested. You will also receive a Loan Estimate that outlines your rate, payment and estimated closing costs. This is often when you decide whether to lock your rate.
These two steps are easy to confuse, but they serve different purposes:
You will also need to secure homeowners insurance during this stage, since lenders require proof of coverage before closing. Shopping early is wise, especially in areas where flood or wind coverage is needed, because quotes can take time.
An underwriter reviews your income, assets, credit and the property details to make sure everything meets the loan guidelines. It is common to receive requests for additional information, such as a letter explaining a deposit or an updated statement. Responding quickly keeps things moving.
During this period, keep your finances steady. Avoid opening new credit, making large purchases or changing jobs without talking with your loan officer first.
Once underwriting signs off, you receive the clear to close. You will get a Closing Disclosure at least three business days before closing that shows your final loan terms and the cash you need to bring. Compare it with your Loan Estimate and ask about anything that looks different.
At closing, you sign your loan documents, pay your remaining down payment and closing costs, usually by wire or cashier’s check, and receive the keys. Always verify wiring instructions by phone with a known number, since wire fraud scams sometimes target buyers at this stage.
After closing, your loan may be serviced by your lender or transferred to another servicer. Either way, you will receive information about where to send payments, and your first payment is usually due about a month or more after closing.
If you are just getting started, our first-time buyer page is a great resource. And when you are ready to begin or have questions along the way, contact FLO Mortgage. We will guide you from pre-approval to closing day.
A FLO Mortgage loan officer can walk through your options, run real numbers and help you choose a loan that fits.
This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.
© FLO Mortgage, LLC. All rights reserved. Company NMLS #1835856.