Are you considering purchasing your dream home? If so, then you are probably looking into various financing options. Getting a mortgage can be stressful but with the right planning you may find yourself pleasantly surprised.

Here are 8 initial steps of the mortgage process in Louisiana:

  1. Try to obtain a pre-qualification or pre-approval letter with a lender. You will likely be required to provide some income and assert documentation to the lender at this stage.
  2. You should then submit a loan application to the lender, either directly or via a
    mortgage broker.
  3. Within three days, you should receive a “good faith estimate” from the lender, which breaks down the estimated closing costs. These are just estimated costs and the final
    costs could vary.
  4. You may then be required to send your lender more financial disclosure documents. These may include several months of bank account statements, documentation of rent payment, statements of outstanding loans, tax returns for the past couple of years, and recent pay stubs. The lender may even request your employer’s contact information.
  5. You may be required to send other documentation, such as marriage licenses and divorce settlements. The lender may also want to see documentation relating to child support and/or other judgments. The lender will also want to see documentation related to any bankruptcy or insolvency proceedings.
  6. The lender or mortgage broker will order an appraisal of the property because it is the collateral for your mortgage. If the appraisal is lower than the contract price, then depending on the exact terms in the contract, you may have time to negotiate a reduction in price with the seller.
  7. If you are approved, the lender will issue you a “loan commitment letter” (also known as a “preliminary loan approval”), which states the lender’s willingness to provide the mortgage if certain conditions are met. Your letter may have one of the following results:
    1. Denied;
    2. Approved with no further conditions;
    3. Suspended, or;
    4. Approved conditionally.
  8. If you choose to proceed with the mortgage, you should purchase homeowners’ insurance and provide documentation of it to your lender.

Buying a home may seem intimidating, but adequate preparation can ease the load. Give yourself enough time to gather all the required documents.

You may also want to speak to experienced professionals who can help guide you along the way. Here at Smiley Law we are always ready to take your mortgage related questions. Contact us today for a free consultation.

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Seth Smiley
Seth is an attorney licensed to practice in Louisiana and California. He is the owner and lead attorney at Smiley Law Firm. To speak with Seth fill out the form on this page.
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