The Birmingham home-buying and loan process
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Mortgage Pre-Approval
Talk to a lender first so you know your real budget before you start looking. A pre-approval letter also tells sellers you're ready to move.
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House Shopping
Search active listings, tour homes, and narrow in on the right property for your budget and goals in the Birmingham area.
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Loan Application
Once you're under contract, you'll submit a full application with your chosen lender: income, assets, and the property details.
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Loan Processing
Your lender orders the appraisal and verifies your financial documents. This is usually the longest step, so quick responses to document requests keep things moving.
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Underwriting
The underwriter reviews everything and clears any remaining conditions. This is where most closing delays come from, so stay reachable.
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Closing
You'll sign the final paperwork, pay your closing costs, and get the keys.
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Funding
Your lender wires the funds, the deed records, and the home is officially yours.
Lenders I work with
I'm not a lender, but I work with local lenders regularly and can point you to one who's a good fit. A few I've closed deals with recently:
- Rena Starr, Loan Officer, Safetrust Mortgage
- Trey Horton, Branch Manager, Rate (Guaranteed Rate)
- Paul Leara, Loan Officer, Mountain Mortgage
- Jake Jones, Owner, ClearFi Loans
Ask me for an introduction, or use the calculators below to get a sense of your numbers first.
Curious what your next property could cash-flow? Get a free deal analysis.
Questions about financing? Call 205-319-0703.
Words to Know
Home Mortgage:
A loan offered by a bank, mortgage company or other financial institution for the purchase of a primary or investment residence. In a home mortgage, the owner of the property (the borrower) transfers the title to the lender on the condition that the title will be transferred back to the owner once the loan has been fully paid and all other terms of the mortgage have been met.
Borrower:
The person borrowing the mortgage money, who either has or is creating an ownership interest in the property.
Lender:
Any organization lending the mortgage money, but usually a bank or other financial institution (Lenders may also be investors who own an interest in the mortgage through a mortgage-backed security. In such a situation, the initial lender is known as the mortgage originator, which then packages and sells the loan to investors. The payments from the borrower are thereafter collected by a loan servicer.).
Principal:
The original dollar amount of the loan, which may or may not include certain other costs; as any principal is repaid, the principal amount will decrease.
Interest:
A financial charge for use of the lender's money.
Mortgage Loan Types
The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable-rate mortgage (ARM) (also known as a floating rate or variable rate mortgage).
In a fixed rate mortgage, the interest rate, remains fixed for the life (or term) of the loan. In case of an annuity repayment scheme, the periodic payment remains the same amount throughout the loan. In case of linear payback, the periodic payment will gradually decrease.
In an adjustable rate mortgage, the interest rate is generally fixed for a period of time, after which it will periodically (for example, annually or monthly) adjust up or down in relation to a market index. Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where fixed rate funding is difficult to obtain or prohibitively expensive. Since the risk is transferred to the borrower, the initial interest rate may be, for example, 0.5% to 2% lower than the average 30-year fixed rate; the size of the price differential will be related to debt market conditions, including the yield curve.
Mortgage Loan Process
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