Here is a description of what really happens, what to expect and most importantly what will be expected of you at each stage of your mortgage. When you know what to expect, you will have a stress-free mortgage experience.
1. Pre-qualifying
By calling or filling out the online application with your brief financial status I can help you determine if you qualify for a mortgage.
2. Pre-approval
Get preapproved for a mortgage: You and I sit down and do an in-depth analysis of your debts, financial history, and obtain your current credit score to see how much money you will qualify for in purchasing your home. I give you a letter of “Conditional Commitment” so that you can shop for a home and know how much to offer the seller.
3. Loan Commitment Letter
A commitment letter will issued only when the bank is certain that it will lend you the funds necessary to purchase your home.
4. Documentation
You will need to start gathering documents needed to proceed with the sale of your home. See a full list of what may be expected of you here.
5. Application
This is the meeting with me. This is when you will put your signature on the paperwork and sign the mortgage application verifying the information that will be submitted to the bank. In the past, this was always done in person, but progress now makes it possible to have these papers downloaded and printed out or sent to you. The preliminary questions can be answered on the phone and the application filled out in advance.
This is the time to ask any and all questions you may have about your mortgage. You are paying good money to get this mortgage and should not ever sign anything you do not understand. I encourage my borrowers to ask questions. Problems arise later on from not asking questions or from making assumptions about how you think the process works.
6. Processing
A mortgage professional reviews the application to make sure that it contains an accurate picture of your financial situation prior to submitting the application to the underwriter of the lender that will approve your mortgage.
If you get a call during this time, don’t panic. This is normal and does not indicate that there is a problem with your application. We just need to ensure that everything is accurate to make the rest of the mortgage process go faster.
7. Underwriting
Underwriting is where the underwriter looks at the information I submitted and that it is an accurate picture of your financial abilities to pay the loan. The underwriter makes the decision as to whether or not your application is approved.
8. Clearing Conditions
“Conditions” are requests by the underwriter for additional information in order to make a decision. This can be as simple as verification employment or as complicated as verification of title. Please be patient and work with me to get these cleared up as soon as possible to get the process moving forward.
9. Closing
Congratulations! You made it! This is the time that you actually sign the papers committing yourself to paying the bank for your property purchase.
Get Preapproved for a Mortgage!
Be sure to review the papers you are asked to sign and bring the Good Faith Estimate you received to compare and make sure all the costs that were presented up front are still the same.
A good mortgage professional will never change things, but there are some bad apples that prey on people and change these numbers hoping that you will sign them rather than insist it is what you were promised. If these numbers are not the same, WALK AWAY!
There are times that the mortgage person has made a mistake and the numbers are actually correct. If the explanation is satisfactory and fully explained so that you understand it, this can be OK. Just make sure you understand any explanation.
I hope I have given you a decent insight of what you can expect when applying for a mortgage. I try to give you the information you need to make an informed decision and prepare you for some of the hurdles you might come across during this time. The less stress you have to endure, the more enjoyable the closing will be when you take possession of your new home.