Our clients will be Educated, Encouraged, & Empowered to a more Self-Reliant Attitude toward Home Loan Financing.
"Our Clients will be Educated, Encouraged, and Empowered
to a more Self-Reliant Attitude toward Home Loan Financing."
Below you will find a synopsis of the home loan process. On the surface it doesn't seem to be that complicated (and it really isn't) however once your file gets to underwriting it takes on a new life. So we suggest that you adequately prepare yourself for this endeavor.
We recommend that you give us a call six to twelve months prior to beginning your home buying process; especially if you are unaware of what your credit report may contain. It would be prudent to give yourself as much time as possible to correct any errors.
►Your Mortgage Consultant (MC) will take your loan application and get permission to pull your credit report (s). The MC will then let you know how much of a mortgage loan you qualify for (based on your debt to income ratio) and issue a “Pre-approval” Letter.
►Your MC will go over your credit report and explain how your credit will affect your financing and collect the requisite signed documents i.e.: the loan application, disclosures, copy of your social security card, copy of your drivers license, your pay-stubs, W2s, bank and retirement statements, and go over the fees associated with your loan.
►Your processor will run your application and credit profile through the automated underwriting system for a preliminary loan status report. The status report will generate one of three responses: Approve Eligible, Refer Eligible, or Refer.
Approve Eligible means that based on the systems general loan guidelines the borrower (s) are qualified for the loan. However, the mortgage lender will have the final say and will typically have additional conditions for the borrowers. Refer Eligible means that the system needs a human being to “manually” underwrite all aspect of the loan due to its limited compatibility with the systems general loan guidelines. Refer means that the loan does not meet the base requirements for approval and will be declined.
►The processor will continue processing the loan by having the following verified: your employment, your rent and/or mortgage payments, and your funds to close. The processor will order all of the necessary documents from the title company. He/she will check with the title company regarding the status of the title commitment, tax certificates, survey, wiring instructions, and any homeowner association transfer fees.
The lender is now responsible for ordering the appraisal. They will send you an additional set of disclosures and upon receipt confirmation they will order the appraisal.
►If you have chosen to use a “mortgage broker” your loan will be shopped (using your original application & credit report) to several banks and mortgage investors while maintaining the integrity of your credit scores. The mortgage broker acts as a “middle man” and will find the best financing based on your specific needs.
Mortgage brokers also have access to “wholesale lender pricing.” The discounted rates are passed onto you along with much more flexibility in terms of products and guidelines.
On the other hand, if you opt to visit Mortgage Banks for a rate quote, each bank will have to pull a new credit report each time. (Lowering your credit scores) Additionally, the bank will only be able to offer you what’s currently available in their limited portfolio.
►As soon as a lender has been identified your file will be sent to their underwriting department. Two to three days later, your processor should receive a “Conditional Loan Approval” from the lender. This approval will list any outstanding documents required by the lender. Once all of the conditions have been satisfied he/she will receive a “Clear to Close.”
►Typically the sales contract will specify when and where the closing will take place. The processor will notify the lender where to send the closing documents and choose an appropriate time for the closing. Title offices or Law offices are the typical locations where home loan closings take place. However it’s not unusual for a certified closing agent to perform the function at the home of the buyer, seller, or a neutral location.
All of the necessary document that requiring a signature will be sent or brought to the location of the closing / settlement.
►The closing will require you to provide identification and sign a number of documents. All of the documents are important however, the three most important are:
The HUD 1 / Settlement Statement will review all of the final fees associated with your loan. Make sure that the fees line up with the ones that were given to you by your mortgage consultant.
The Promissory Note will confirm the Interest Rate as well as the Principle & Interest portion of your monthly mortgage payment.
The Deed-in-Trust will confirm the property address and the new owner (s) of the property. Make sure that the address as well as the spelling of your name (s) is correct.
►Lastly, your settlement agent will take the entire package of signed document to the back office. He or she will fax or email the “three most important documents” along with you ID as well as some other closing documents. The lender will review them for accuracy and if all is correct they will fax a “funding number” to the closing agent.
The funding number will allow the title or settlement office to release all of the funds associated with your transaction. The seller will get his or her funds, the borrowers will be formally responsible for the mortgage loan, all third parties will receive their funds and finally you’ll receive the keys to your new home. Mortgage Assistance Program
Phone: 281.674.5897 Fax: 713.634.2838
rlavong@ev1.net
