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Understanding the Basics of Mortgages
A mortgage is a loan specifically for purchasing real estate. It empowers borrowers to buy homes without paying the total cost upfront. Mortgages typically involve two main components: principal and interest. The principal is the amount borrowed, while interest is the cost of borrowing that amount. There are various types of mortgages, including fixed-rate mortgages, adjustable-rate mortgages, and government-backed loans.
Preparing to Apply
Before applying for a mortgage on Rocket Mortgage, gather all necessary documents, including proof of income, tax returns, employment verification, and lists of debts. Check your credit score. A good credit score is vital to securing better interest rates. Determine the amount you can afford for a down payment, typically between 3% to 20% of the home’s purchase price.
Creating an Account on Rocket Mortgage
Visit the Rocket Mortgage website and click on the 'Create an Account' button. Fill in your personal information, including your name, email address, and phone number. Choose a secure password and complete the account creation process by verifying your email.
Starting the Application Process
After logging into your Rocket Mortgage account, select 'Start My Application.' You will begin by entering basic information about yourself, your income, and your credit history. Rocket Mortgage will guide you through a series of questions to assess your eligibility.
Submitting Required Documentation
Upload required documents directly through the Rocket Mortgage portal. These documents may include W-2 forms, recent pay stubs, bank statements, and details regarding any outstanding debts. Digital uploads are preferred as they can speed up the processing time.
Understanding Loan Options
Once your application is submitted, review the different loan options presented by Rocket Mortgage. You may choose between fixed-rate and adjustable-rate mortgages depending on your financial situation and long-term plans. Evaluate interest rates and terms to find a mortgage that meets your needs.
Locking in Your Rate
After choosing a loan option, you have the opportunity to lock in your interest rate. Locking in a rate protects you from fluctuations in interest rates until your loan closes, saving you money over the life of the loan. Discuss with your mortgage advisor when is the best time to lock in your rate.
Receiving a Loan Estimate
After your application is processed, Rocket Mortgage will issue a Loan Estimate (LE). The LE outlines important details about your mortgage, including the loan amount, interest rate, monthly payments, and closing costs. Review this document carefully to ensure that all information is accurate.
Completing the Mortgage Approval Process
If all is in order, Rocket Mortgage will move your application into the approval stage, where they may request additional information. You may undergo a home appraisal at this stage, which determines the property's market value. Once approved, you will receive a Closing Disclosure detailing your final terms.
Closing on Your Mortgage
The final step in the mortgage process is closing, where you will sign the loan documents. Review the Closing Disclosure again to ensure all terms are as discussed. Bring any required funds for closing costs, which can be paid by cash, check, or wire transfer.