While finding a new home can be exciting, navigating the mortgage process can be overwhelming for some. Knowing what steps, you need to take can help the process go more smoothly. Here are the basic steps you need to take to obtain a mortgage loan:
Pre-qualification starts the loan process. Once we gather the information about your income and debts, a determination can be made as to how much you can pay for a house. Since different loan programs can cause different valuations you should get pre-qualified for each loan type the borrower may qualify for. It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you don’t qualify under one program, there may be others where you can qualify.
- The Application
The application is the next step of the loan process. With the help of a mortgage loan officer, you complete the application and provides all requested documentation. A loan application is not considered complete until you have given us at least the following information: (1) Your name, (2) Your income, (3) Your Social Security number (and authorization to check your credit), (4) The address of the home you plan to purchase or refinance, (5) An estimate of the home’s value and (6) The loan amount you want to borrow.
- The Loan Estimate
A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. We will deliver this to you with in 3 days of your fully completed loan application. The Loan Estimate provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. The form uses clear language and is designed to help you better understand the terms of the mortgage loan you’ve applied for. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you. When you receive a Loan Estimate it does not mean that your loan has been approved or denied. The Loan Estimate shows you what loan terms we can offer you if you decide to move forward.
- The Intent to Proceed
After you receive your Loan Estimate, it is up to you to decide whether to move forward with us or not. If you decide not to proceed with an application for a particular loan, you don’t need to do anything further. If you do intend to proceed with us, you must take the next step and tell us in writing or by phone that you want to move forward with the application for that loan. All lenders are required to honor the terms of the Loan Estimate for 10 business days. So if you decide to move forward more than 10 business days after you receive a Loan Estimate, please realize that market conditions may make it necessary to revise the terms and estimated costs and provide you with a revised Loan Estimate.
- Request for Documentation and Processing
Once you have completed the loan application, accepted the loan estimate and indicated your intent to proceed we will request documents from you in order begin the processing of the mortgage. Once you get to this stage of the loan process, we will give you a specific set of documents that we will need for your particular loan. The Processor orders the Credit Report, Appraisal and Title Report. The information on the application, such as bank deposits and payment histories, are then verified. Any credit derogatories, such as late payments, collections and/or judgments require a written explanation. The processor examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to the lender.
Once the processor has put together a complete package with all verifications and documentation, the file is sent to the underwriter. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into “suspense” and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an “approved” status.
- Closing Disclosure
The Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).
We are required by law to give you the Closing Disclosure at least three business days before you close on your mortgage loan. This three-day window allows you time to compare your final terms and costs to those estimated in the Loan Estimate that you previously received from us. The three days also gives you time to ask us any questions before you go to the closing table.
Once the loan is approved (Yay!), the file is transferred to the closing and funding department. The closing attorney then schedules a time for the borrower to sign the loan documentation.
After the documents are signed, the closing attorney returns the documents to us, the lender, who examines them and, if everything is in order, arranges for the funding of the loan. Once the funding occurs, the most important part of the process takes place – you get the keys of your brand-new house! Or in case of a re-finance, the monies are disbursed to all appropriate parties.
At Your Home Now Mortgage, we believe that education is key in helping people achieve the dream of homeownership. Our professionals will explain every step of the process in detail and will be available to answer any questions you may have.
Ready to start? Call us at 833-888-1669!