Understanding the Mortgage Process
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Understanding the Mortgage Process
Copyright (c) 2007 Clint Wooley
HomeMax
http://www.homemax.org
Once you find a lender you are comfortable with, you will begin
the mortgage process by making an application with the lender.
Obtaining a mortgage to purchase a home is a process, not an
event, beginning with the application and ending with the
closing.
Applications may be taken by loan officers in person, by phone,
or by mail. Different lenders have various preferences, although
most will require original signatures on applications and
disclosures at some point in the process.
You will be expected to provide information about your income,
assets, and personal information at the time of application, and
during the process. Lenders will ask you for documentation to
prove information such as:
W-2 forms for last 2 years
Paystubs to cover a monthly pay period with YTD information
Bank Statements
Drivers License
Contact Information for Landlord or Rental Mgt. Co.
If you are getting a pre-approval, most lenders will only charge
a small credit fee to cover the cost of obtaining your credit,
typically $50 or less. Once you have a house under contract, in
order to move forward with the process, your lender will usually
collect a fee to pay for the appraisal for your home. The purpose
of the appraisal is to prove the value of the home to the lender.
This fee will be from $300 to $500, depending on your market. You
will be entitled to a copy of this report, and you should request
a copy of it electronically (usually in a .pdf format)
It is usually at this point in the mortgage process that you will
be introduced to the Mortgage Loan Processor, who is responsible
for assembling the required documents, verifying them, and
sending the loan package in a prescribed order to be
underwritten. Processors perform a very critical function in the
mortgage process. It is important that you provide all the
documentation requested to your processor or loan officer, so
that they may submit a complete package to be underwritten.
Once all the required documentation is assembled, it will be sent
by courier or sometimes faxed to be underwritten. The
Underwriter’s job is to review and make a loan decision based on
the information and documentation provided and make certain that
it is within the underwriting guidelines set up by the lender.
Usually there will be some conditions to be met for a “final”
loan approval. It is important to remember the complexity of this
process and not be frustrated or angry if the processor or loan
officer ask you for additional information, sometimes just days
before closing is scheduled. Sometimes these requests will seem
ridiculous, or asking for information that doesn’t seem
pertinent. Keep in mind that the Underwriter is simply trying to
do their job, and has checklists they must follow.
Once all the conditions have been received and sent to the
Underwriter for review, they will be “cleared.” After all
underwriting conditions have been cleared, the file will be
considered “Clear to Close.” At this time it will be sent to
the closing department, where documents will be generated for
your closing. These documents will usually be sent by email to
the attorney or closing agent.
Once your closing is scheduled, it is important to be in contact
with your lender and the closing agent. They will inform you of
any additional documentation that may be required for closing,
and inform you of the amount of money you will need to pay at
closing. Funds for closing will be wired from the lender to the
closing agent directly, and disbursed at closing. Closing
sometimes happens in a room with all parties present. You have a
right to request that your loan documents be signed in private,
due to the personal nature of the documents you will be signing.
Once these documents are signed and you receive copies, the
mortgage process is complete, and you are officially a home
owner. Congratulations!!!
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Clint Wooley is co-owner of Sunscape Rentals
and Sales, and HomeMax.org, a helpful source
for information, tips and articles for first
time home buyers. HomeMax offers free
Realtor referrals and Lender referrals.
HomeMax Case Managers will help guide
you through the home buying process.
http://www.homemax.org
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