The Loan
Process – Step By Step
The mortgage loan process may vary depending on the choices you make before the final closing. It is generally recommended that you meet with your lender for a loan pre-approval to ensure you know the loan amount for which you are qualified before you begin touring potential homes. During the pre-approval process, the majority of documents necessary to process and secure your mortgage will be gathered and reviewed. Of course, being pre-approved in advance of your impending home purchase may save valuable time at this stage. However, if you choose to become pre-qualified or have not discussed obtaining a loan before entering a contract with the sellers, then now is the time all documents verifying your income and debts will be required.
The documents you provide will help the lender determine whether your credit history reflects your willingness and ability to repay the loan and ultimately how much you can afford to spend on your home. The results have an effect on the loan amount you receive and the interest rate you obtain.
Following is a list of
the basic items you will need to provide:
Self-employed or paid by
commission applicants will need:
·
Federal income tax returns with all schedules
for previous 2 years
·
Corporate tax returns and all schedules, if
applicable
Applicants who filed a
bankruptcy within the past 7 years will need:
·
A copy of petition, schedule of creditors, and
discharge papers
·
A handwritten explanation of the reason for
bankruptcy
If you have any questions about what is needed, just contact your Mortgage Planner to quickly clear up any confusion.
Your mortgage
loan application can be taken over the telephone, via fax or online.
After the
application is received, it will be reviewed to make sure the information is
complete and consistent. The information
is verified and the presence of all essential documents is confirmed. An appraisal is ordered to ensure the
property is worth the loan amount. Your
credit report is ordered.
Once all
documents are gathered, your loan package will be submitted to an underwriter
who will evaluate your loan information as well as your ability to make the
monthly loan payments.
You will be
asked to provide any additional information needed by the underwriter and
notified of the conditions which must be met in order for your loan to close
and fund.
The legal
documents that are to be signed in escrow will be ordered.
A title
agent reviews the settlement statement with you. This document includes all the final costs
for the purchase. You will sign all
documents such as the mortgage or deed of trust, note, Truth in-Lending
Disclosure and other miscellaneous closing documents. You will give the closing agent a certified
or cashier’s check for the down payment and closing costs. (purchase)The seller
will sign a deed and other miscellaneous closing documents.
The lender
receives the signed documents and verifies all conditions have been met and
that the figures are accurate.
The funds
are disbursed and the transaction is recorded at the