Mortgage Process

Mortgage process - The home buying process can often appear to be a stressful one especially to the first time home buyer. There is nothing simple about getting a mortgage. You have to find a house, negotiate a price, get a home inspection, order an appraisal, underwriting approval and so on. It does not have to be difficult or grinding process.

The mortgage process has 5 steps

1. Pre-approval
   
2. Sales contract
3. Loan approval
   
4. Clearing conditions
   
5. Closing
   

In today's current market the national average to close a loan is 46 days. Starting from the time you sign the contract  to closing.

Pre-approval

Before you begin to search for a home you will need to get pre-approved. During this process your loan officer will determine whether you qualify for a loan by reviewing your income, credit profile, assets and overall creditworthiness.

Your loan officer will explain to you how much money you will need for the down payment and give you a break down of your closing cost. You will know exactly how much money you'll need to buy your home.

Once you have been pre-approved you will receive your Pre-Approval Certificate. You can submit your Pre-Approval Certificate with the purchase contract to the seller which enhances the offer and will make you more attractive to the seller.

Sales contract

Once all parties have agreed to the purchase price and terms have been signed, there is an executed contract, which becomes the foundation of the new mortgage. There are now 3 steps that need to be accomplished by the borrower in order to proceed with the loan.
•    Decide on a loan program.
•    Sign all necessary loan documents
•    Borrower must gather all their personal documentation to submit

Loan approval

•    The borrower may choose to lock their rate at the time of application or may choose to float their loan to be locked at a later time.
•    Generally speaking, the best pricing is available at 30 and 45 day locks. Knowing the closing date on the Purchase Contract helps us to determine the best time to lock the rate.
•    Rates fluctuate every day. It is always a good idea to secure your rate as soon as you can to avoid a surprise increase if the market rises.

Clearing conditions

There are three major steps that are being accomplished between the client’s application signing and their closing with will order an appraisal on the property to be sure that you are paying a fair market value for the home you are purchasing.
•    Title and escrow - The real estate attorneys will generally order these services and then forward the findings to  so that we may include them in our final package.
•    Underwriting - Each loan will be sent to an approved underwriter who reviews the application, supporting documentation, financial information, sales contract, appraisal and title to be sure all necessary criteria and regulations are met.
(Also read “The Loan Approval Process.”) (this should link to the page)

Closing

•    The day before closing, the title company will generate a final statement of charges that incorporate the lender’s, attorney’s, realtor’s and title fees as well as taxes and insurance escrows.
•    On the closing day, you’ll sign all final closing documents at a title company.
•    Typically, your first mortgage payment will not start until the second 1st of the month after the closing date.

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