The Loan Process
The loan process consists of the following steps:
Pre-Approval
A loan pre-approval is just that; a pre-approval! Before you begin shopping for a home, you will want to become pre-approved for your home loan. This approval will help you determine your maximum purchase power, as well as your comfort level. Most sellers will require you to submit a pre-approval letter with your purchase offer. At the pre-approval application, we will gather information about your employment, income, assets, and debts. We will also access your credit report at this time.
We will be looking at two key factors. First, your ability to repay the loan and second, your willingness to repay the loan.
- Ability to repay the mortgage is determined by analyzing your employment, income, and debt. Generally speaking, you will want to keep your monthly obligations (including the proposed housing payment at 45-50% or less of your total gross monthly income).
- Willingness to repay is determined by reviewing your past payment history. Your credit report documents your financial behavior over the past seven years -- how much credit you have, how long you've had it and whether you pay your bills on time, among other things. Typically, we will focus on the most recent 24 months
During this phase, we will provide you with an estimate of the various fees and/or closing costs you should expect. This estimate will include our fees as well as any third party charges. It is important to remember that there are no rules, just guidelines. We manually review all loan applications to insure you receive the best mortgage program, at competitive rates.
Mortgage Programs and Rates
There are many loan programs from which to choose, each with different rates, points and fees. This makes shopping for a loan time consuming, and it can be frustrating. We will help you choose the right loan program by evaluating your situation and recommending the most suitable mortgage program(s), thus allowing you to make an informed decision.
Processing
Once you purchase a home, the final processing of your mortgage begins. Your Processor will verify your employment, income, assets and debt. They will also order an appraisal and title work on the subject property. Upon receipt, your Processor will examine 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 underwriter.
Underwriting
Underwriting is the detailed analysis preceding the granting of a loan. Once the processor has put together a complete loan package, the file is sent to the underwriter. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If the loan is acceptable as submitted, the loan is put into an "approved" state. If more information, documentation, or clarification is needed, the loan is put into "suspense" and the borrower is contacted to clear the "suspense" items.
Closing
Once your loan is approved, the file is transferred to the closing department. The closing department prepares the documents you will sign at the closing. The closing typically will take place at our office or the escrow office. At closing, you will sign the final loan documents and obtain the keys to your new home.
Completion
A typical mortgage transaction takes between 21-30 business days to complete. Contact us today to discuss your particular mortgage needs.