Home shoppers and sellers are flooding the market with demand, creating recording-breaking volume and unique opportunities for people looking to get in on the action.
With both parties in the home-buying process fueling the market, there are plenty of success stories on how home shoppers are fulfilling their dream to own a home, regardless of market conditions or tight inventory.
So, what’s the secret to their success? It starts with being a well-prepared buyer and beginning the mortgage application process before you even look at homes.
One of the best aspects of the mortgage application process is that there’s not a single, one-way approach that you have to follow when it comes to starting your journey. Whether you prefer personal interactions with your loan officer or as little interaction as possible, opting for a fully digital experience, both routes offer the support you need to start the process to buy a home.
As you begin, here’s what you can expect to happen, so you’re as prepared as possible.
Step 1. Determine your budget.
You can go online and use a home affordability calculator to see what price you could comfortably afford. You’ll need total monthly debts and annual income on hand when you do this.
If you’re eyeing a particular home or neighborhood, you can enter the price into a monthly mortgage payment calculator. This will help you gauge whether the home is in your price range or not.
Having a clear budget in mind can help you be more efficient in your home search. Once you get pre-approved, your loan officer will give you a firmer number based on the loan amount you qualify for.
Step 2. Fill out an application.
There are more options than ever before when it comes to filling out a mortgage application and getting pre-approved. Now, you have the option to complete the majority of the mortgage process entirely online, using digital applications and secure portals. Or, you can opt for a more hybrid option, moving between submitting information online and jumping on the phone to talk to your loan officer.
If you prefer the online route for convenience, Citi Producing Lending Manager Fritz Julien says, your Citi representative is able to provide updates through the online portal, so you know exactly what’s going on and why.
For those wanting to jump on the phone for updates instead, communication can be just as informative and timely.
Step 3. Deliver documents that demonstrate your income.
Be ready to submit documents that verify your financial situation. This will include things like past tax returns, W-2s, pay stubs and more. You’ll also need to provide recent bank and savings account statements.
These are simply used to determine how much you can afford for your mortgage payment — given your debts and income—as well as how much cash you have on hand for emergencies. While many home shoppers submit important documents through a secure online portal, you have other options.
Your loan officer may come back with questions about your documents or even request more documentation in some cases, which all has the end goal of benefiting you, Julien says.
Julien explains that they work with customers to streamline the process, and once they get your loan in front of the underwriter, they want it to be as easy as possible.
Step 4. Choose the best loan and down payment option.
After you’ve applied for your pre-approval, your loan officer will evaluate your information and recommend potential loan options. There are several choices here, including FHA, conventional, jumbo and more, and each one has different eligibility standards and down payment requirements (some that are as low as 3%).
The right one will depend on how much you’re looking to put down, your ideal mortgage payment, and your financial profile.
“At Citi, we really customize the products that we are offering based on the client’s needs,” Julien says. “We really get to know our customers, and we’ll recommend the top two or three that we think they’ll be able to benefit from.”
You may want to ask your loan officer to run different scenarios with your loan options, breaking down your monthly payment, total interest costs, any insurance requirements and more. This can help you determine the best choice for both your short-term and long-term financial needs.
Step 5. Lock your rate.
To keep your interest rate from rising while you wait for your loan to close, you’ll want to lock it in. Rates change on a daily basis, as Julien explains, so it’s important to keep an open line of communication with your loan officer. When you do win an offer and have a contract, let them know so they can lock in your rate.
Step 6. Keep the status quo while you wait to close.
Your preapproval is based on the financial details you provide on your application. If those details change, your approval might, too, so be careful with your finances while your loan is in process.
That means avoiding big-ticket purchases and not taking out any new debt. “If you’re thinking about buying a car, you should hold off as it could impact your home purchase,” Julien says. It’s worth the wait in order to get the best home for you.
Step 7 and beyond. Lean on your loan officer.
This is still just the beginning of your relationship with your loan officer.
“Ask them questions,” Julien says. “How much money do I need to bring to the table? Are there any other products or services that I can be benefiting from? What down payment assistance programs do I qualify for?”
Their goal is to help you land your dream home so use them to the fullest, Julien says. Just as you’ve relied on them to get to this step, continue to lean on them and keep them in loop, so they can continue to guide you along the way.
At the end of the day, Citi loan officers want you to be as excited about your home purchase as they are. Want a true partner on your home-buying journey? Start your online mortgage application with Citi today, so you can confidently be on your way to owning your dream home.
Sponsored content presented by Citibank, N.A. NMLS #412915. Member FDIC and Equal Housing Lender.
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