Before we begin our discussion of the Closing Process, there are a few things you should remember throughout the process of obtaining a home loan:

• Ask questions. The professionals who will be assisting you have been through this process dozens, perhaps hundreds, of times. They may forget that you have never done this before, or that it's been years since you purchased your last home.
• Understand before signing. Don't sign anything you don't understand. In the event you see what you believe to be an error in a document, call it to the correct person's attention. If the document it something you must sign, have it corrected before you sign it. The slight inconvenience now will ensure that the process moves along much more smoothly later on.
• Remember: You are the customer. Dealing with so many new experiences, it is easy to forget that you are the one "signing on the dotted line." You have, in essence, hired the various professionals you are dealing with to assist you in buying a home. You have every right to expect excellent customer service, and Oster Homes will strive to provide it in every transaction in which we participate.

Select a Mortgage

How much you will pay each month for your home is determined by a number of factors, including the interest rate of your loan, whether that rate is fixed or points, and the length of the loan. Your down payment is also a very important factor because it will reduce the size of your loan. How much do you have in savings? Or will you be obtaining the down payment from the sale of your current home or from other sources?

A longer loan term will result in lower monthly payments, but you will pay more in interest over the life of the loan. If you choose to have an adjustable rate mortgage (ARM), you should understand what the caps are on the interest rate. That is, how high can the interest rate rise, and how fast?

You will also want to know if there is a prepayment penalty should you decide to make advance mortgage payments.

When comparing loans, be certain to look at the total cost of that loan including interest, points, and other fees. Most importantly, do you feel comfortable with your monthly payment? Will you continue to feel comfortable with that payment under the terms of an ARM if the interest rate rises?

Your mortgage lender can help you make the necessary calculations so you can choose the mortgage that's right for you. Your lender can also tell you if certain government loan programs, such as FHA or VA, will benefit you.

Because homeowners can write off interest payments and real estate taxes for the home in which they live, tax savings can be significant. These tax advantages will be greatest early in the life of the loan, when most all of your payments apply toward interest. Don't forget to look at the tax benefits in your particular situation, because you may find you can afford the home of your dreams much sooner than you had expected.

Submit an Application

You will be required to fill out a mortgage loan application. At the time it is submitted, you will have to pay loan processing fees, as well as fees for such things as the appraisal, title search, and credit report. Feel free to ask what the various fees cover in your specific case.

When you submit your application you will also be asked for paperwork such as recent tax returns, pay stubs, and bank statements. The purpose of this documentation is to help the lender determine how much mortgage you can comfortably afford. In addition to any paperwork you are asked to submit initially, you may be asked for additional documentation at any time during the loan approval process. This is because the lender will want to see paperwork that answers any questions that might arise after an initial review. What you are doing is "painting a picture" of your financial situation so that it is clear to those who must approve your loan.

Property Appraisal

A professional appraiser will determine the market value of the property you are interested in buying. The recent selling prices of similar homes in the area will be used to help arrive at the market value, which will then be sent to the mortgage lender.

The appraisal is important because the property you are buying must be considered to be worth what you have agreed to pay the seller for it. In other words, the lender will not want to give you a loan in excess of the value of the property. In most cases, if the seller and buyer have come to a reasonable agreement as to the price based on what you both honestly believe to be its market value, this will not be a problem.

Verification Process

The verification process is when the mortgage lender reviews your paperwork and seeks independent confirmation of your financial situation. The purpose of this process is to ensure that you can indeed afford the mortgage you are seeking.

During this process your credit report will be ordered because it provides information on your current and past debts and on your payment history. Your employer(s) may be contacted to verify your job history and salary. Your bank may be contacted regarding your current savings. If you rent, your landlord may be asked to provide information on your payment history.

When you are approved, you will receive a commitment letter that specifies the terms of the loan.

A title search will be made to ensure that the seller has the legal right to sell you the property you are interested in. If all goes well, you will soon be closing!

Closing

Your closing will be set for a firm date and time that is convenient for all parties.

Schedule a final walk-through of your new home before closing to make sure it is ready for you and to ensure that any contingencies specified in the commitment letter about the home's condition have been satisfied.

You must obtain homeowner's insurance and bring a certificate of insurance with you to your closing.

The closing agent will review the closing documents, such as the mortgage note, and Truth-in-Lending Disclosure Statement with you and have you sign them. Upon agreement that all documentation is accurate and complete, you will pay the closing costs and the lender will give the mortgage amount to the closing agent.

Within several days, the closing agent records the mortgage and deed, followed by the appropriate disbursal of funds from the sale.

Congratulations!

Though it may have seemed that there was no end to the paper trail, you are now a homeowner!