This guide covers preparing for mortgage process in Illinois. Preparing For Mortgage Process In Illinois is different than other states. Illinois is not a community property state. This means that a spouse’s debt is not counted if the spouse is not on the mortgage loan nor is the spouse’s credit. Preparing For Mortgage Process In Illinois is also different. This is because most home buyers and home sellers are represented by real estate attorneys. Other states like California, Florida, Texas, and most other states, the title company handles the real estate closing and buyers and sellers are not represented by real estate attorneys. Illinois is also different because property taxes are paid in arrears. Homebuyers can use property tax prorations towards their down payment on their home purchase. In this article, we will discuss and cover preparing for mortgage process In Illinois.
First Step In Preparing For Mortgage Process in Illinois
Once buyers have decided they are going to become a homeowner, the first step is to get qualified by a lender. Homebuyers need to see what type of loan program they qualify for. They also need to see the amount of mortgage loan they qualify for and how much they can afford. The Mortgage Qualification Process is the most important stage of the Mortgage Process.
Over 80% of our borrowers are folks who either are going through a stressful loan process with a different lender or have just gotten a last-minute mortgage denial.
The main reason why these folks contact us at Gustan Cho Associates is that they are under contract with a property. They have a set closing but are going nowhere with their current lender. The only reason for a stressful mortgage process or mortgage denial is because the borrower was not properly qualified by their loan officer. The key to a solid pre-approval is being properly qualified. A loan officer should do his or her due diligence and not issue a pre-approval letter until the loan officer is not just ready to close the mortgage loan, but close the loan on time and without any stress. All pre-approvals are not created equal.
Preparing Documents and Getting Organized
Once borrowers have completed mortgage loan application and their loan officer has run a tri-merger credit report and have an automated underwriting system approval, the loan officer will request a list of Documents Requirement To Start Your Mortgage Process. Here are tips when preparing the documents required: Take this process seriously. Loan officers should have all pages on documents including blanks on the following docs:
- bank statements
- tax returns
- divorce decree
- bankruptcy paperwork
- foreclosure paperwork
- divorce decree
- other documents
Make sure that it is legible and to include all pages including blank pages:. Copies drivers license and social security card should be legible. Any missing pages will cause delays in processing loan. Return all phone calls and/or emails promptly. Click here to apply for mortgage loan application
Preparing For Mortgage Process in Illinois For Mortgage Application Processing
Once all docs have been submitted to process mortgage loan, a mortgage processor is assigned to the mortgage loan application. The mortgage processor will make sure that the documents submitted are complete. Remember that any missing items or incomplete documents can hinder and delay the mortgage process. A great experienced mortgage processor will not submit an incomplete file to underwriting.
Preparing For Mortgage Process in Illinois With Submitting Documents
Here are the documents that mortgage processors will need to process loan and submit it to the underwriting department: 2 year of employment history starting with the name of most current employer and backtracking the past two years including gaps of employment. Phone and street address of your employer or employers for the past two years.
Length of time at the current employer and the past employers you had for the past two years. What is the title of current employment as well as all employment in the past two years.
Salary: Need to provide two years W-2s and 30 days of most recent paycheck stubs. Profit & Loss statement is required if self-employed. Asset Information such as IRA, Pensions, Social Security Awards Letter. Public assistance if applicable. Child support paperwork if applicable. Alimony if applicable. 60 days bank statements. Investment accounts such as securities. Debt documents such as current mortgages. Liens. Alimony or child support
Letter of Explanations on Derogatory Items on Credit Report
Mortgage Applicants do not need perfect credit to qualify for a home loan. Applicants can qualify for a mortgage with the following. Can qualify for a mortgage with outstanding collections and charge offs without having to pay them off. Qualify for a mortgage with bankruptcies and foreclosures. Qualify for a mortgage with late payments. Qualify for a mortgage with judgments and tax liens. However, borrowers will ned a good letter of explanation for any extenuating circumstances. The mortgage underwriter will want a letter of explanation if the situations above. The loan officer will prepare the letter of explanation for borrowers during the mortgage qualification process.
Mortgage Underwriting Process
A great experienced mortgage processor will not submit a mortgage loan application until the file is complete with no missing documents and no missing pages on the documents submitted. Once a processor deems it ready, the file is assigned to a mortgage underwriter. Mortgage underwriters can underwrite a completely nicely packaged file in a couple of hours and issue a conditional loan approval. If the file is slopping and is missing documents and pages, the file can get dozens of conditions or can just get kicked back altogether. This means possible delays in the mortgage process which can delay the closing. Once conditional loan approval is issued, the file goes back to the mortgage processor.
Preparing For Mortgage Process In Illinois On Clearing Conditions For Clear To Close
Once the underwriter has issued a conditional approval, the file goes to the mortgage processor where the processor will gather the conditions. Here are examples of conditions on a conditional loan approval:
- Updated bank statements
- Updated paycheck stubs
- Verbal Verification Of Employment
- The updated real estate contract extension
- Proof of cash to close
- Other outdated or missing documents requested by the mortgage underwriter
Once the mortgage processor has gathered all the conditions, the processor will submit the file back to the underwriter for a clear to close. A clear to close is when the lender has signed off on the loan and has given the green light to prep closing docs and fund the loan. Click here to apply for mortgage in Illinois with cash to close
Preparing For Mortgage Process In Illinois With Cash To Close
Illinois property owners pay their property taxes in arrears. What this means is that if you are a home buyer in Chicago or any other area of Illinois, the home seller will owe you one year’s property taxes as a credit at closing. Let’s use this case scenario: The homebuyer pays $100,000 home with an FHA Loan in Schaumburg, Illinois. Property taxes are $3,000. FHA requires 3.5% down payment. So the amount he needs to show for the 3.5% down payment is $3,500. The Homebuyer only needs $500 . This because the home seller will owe $3,000 property tax prorations credit to the home buyer. The home buyer can use the property tax prorations for down payment. Homebuyers cannot use seller concessions for the down payment. Sellers concessions are only for closing costs and cannot be used for the down payment. Gustan Cho Associates is a five-star national mortgage company with no overlays on government and conventional loans. We are headquartered in Lombard, Illinois and licensed in multiple states. Please contact us at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.
This BLOG on preparing for mortgage process In Illinois was UPDATED on March 14th, 2024.
