Initial Mortgage Consultation
When you begin thinking about buying a home, contact your local Mortgage Company to get prequalified. A prequalification gives you an estimate of the size of mortgage loan you qualify for based on your credit history, income, and assets. At this time, your mortgage banker will discuss loan options, down payment requirements, and current interest rates. If preferred, you may simply follow an online link to securely apply online. This will give your loan officer the preliminary information they need to determine your prequalification. This is also the perfect time to get set up with their electronic portal to make it easier to securely exchange documents and information throughout the mortgage process.
Initiate Loan Application
Once you go under contract, your loan officer will provide you with an initial list of documentation needed to begin processing your loan. Quickly providing all requested documentation is essential to moving through the loan process without delays. Also, your Mortgage Expert will discuss locking in your interest rate and encourage you to get a hazard insurance quote from an insurance agent.
Once your loan officer has the complete application, he/she will prepare a packet of disclosures for you to sign. Included in these disclosures is the Loan Estimate, which contains information on the cost of your loan. It is very important to review this closely and talk to your loan officer about any questions you may have. Revisions to your loan later on in the process may push your closing date back. It is extremely important for you to sign and return all disclosures within 24 hours from receipt. Any delay with returning your disclosures may delay your closing. Fees for your appraisal will be collected once your loan officer has received your disclosures and payment information.
Once you have received your Loan Estimate and disclosed your intent to proceed, your Mortgage Agent will order your title work and appraisal. The appraisal process identifies the market value for the property. These generally take at least 10 days from the date requested to delivery. As soon as your loan officer receives the appraisal, he/she will provide you and your REALTOR®* with a copy.
*They commit to providing timely and accurate information to your REALTOR®, when prior authorization is received from you.
Next, the loan moves to a loan processor, who reviews the file to ensure all the proper documentation is included. You may be contacted to provide any outstanding or additional items, and verification of employment, etc., may be obtained. Once all the requested information is gathered, the loan will be passed on to underwriting so that a final determination can be made. By this point in the process, please try to limit changes to your contract to ensure a smooth closing.
An underwriter will investigate the information in the file and make the final decision on the loan approval. Underwriting can take as little as one day and up to two weeks, depending on the type of transaction and market conditions. Because each loan is unique, it is common practice for the underwriter to request additional documentation to support what was submitted in the original file. They will notify you if additional items are needed, as well as when a final decision has been made.
Review Your Closing Disclosure
A critical component of the loan process is YOUR confirming receipt by signing the Closing Disclosure (CD) a minimum of 3 business days before closing. This document further reviews the cost of your loan. Mortgage Lenders make every effort to send you this document with ample time to review. However, due to the often expedited nature of the mortgage process, you may receive this document close to the third day prior to closing deadline. As soon as you are able to review this document, it is imperative you sign and return it as quickly as possible. Signing only confirms your receipt of the CD. This integral step requires close communication with your lender to ensure an on-time closing.
Three days after you return your signed Closing Disclosure, you are able to close on your loan! Depending on the amount due at closing, you may need to send a wire to the closing attorney. At the closing, you and the seller will be required to sign the final loan closing documents. After the closing documents are signed, your Mortgage Lender should wire funds for the amount of the loan to the closing agent. The closing agent will disperse the funds. The deed that transfers the title from the seller to you will be sent to the county in which the home is located to be recorded. You will receive the original deed once it has been recorded along with your owner’s title insurance policy if you purchased insurance at closing.
Now, move into your new home!