The Mortgage Application Process
Whether you need a purchase home mortgage loan or a refinance home mortgage loan, the mortgage application process. With purchase mortgage loans, you would need a preapproval. If you are ready to start shopping for a home, you probably need a preapproval. On this blog, we will explain the step by step process from obtaining a preapproval to closing a mortgage loan.
Pre-approval versus Pre-qualification
A prequalification and a preapproval are different. If you want to know whether you are prequalified for a certain loan program, just click on the Fast Quotes icon on this website and fill out the basic general information requested. It will probably take you less than two minutes. I will then contact you and discuss how much of a mortgage loan you could qualify for and an estimate of your monthly payment.
Pre-Approval during the mortgage application process
A preapproval has a lot of weight. If you need a preapproval letter, click on the APPLY NOW icon on the top right section of this website and fill out the 1003 mortgage application. It is a 4 page secured online mortgage application and every section that applies to you needs to be completed. This online mortgage application will eventually be part of your permanent official application you and your coborrower need to sign and is extremely important in the mortgage application process. This application will determine whether you will be preapproved or not.
Pre-Approval occurs before the mortgage loan application starts
Pre-Approval occurs before the loan process actually begins. The lender gathers information about your income and debts, and makes a financial determination about how much house you may be able to afford. Once you have submitted your online mortgage application, we will then submit your application to an automated underwriting system for an official approval from Fannie Mae.
How much home can you afford?
It’s a good idea to know how expensive a home you can afford before you start shopping for one! If you are refinancing the loan on your existing home, then the preapproval process should help you decide whether refinancing is feaseable for you or whether the refinance will save you money in the long run.
A credit check is pulled on the preapproval state of the mortgage application process.
After you have decided on which home to purchase and have a signed real estate contract or once you have decided to go ahead and refninance your current home, we will start the formal mortgage application process. We will forward the online mortgage application that you have completed earlier for signature along with all of the state and federal disclosures as well as the good faith estimate, and a truth in lending disclosure within three days that will itemize the mortgage rates and estimated costs that third party vendors will probably charge.
Signing Mortgage Application and Disclosures
Once you have reviewed and studied the mortgage application and all of the disclosures, sign it and return it to me as soon as possible so we can proceed to the next step in the mortgage application process. We will be requesting all of your financials that will be required to process your mortgage loan such as 2 years tax returns, 2 years W2s, recent bank statements, and recent pay check stubs.
Processing your Loan
Once we received your signed mortgage application and disclosures, our processing department will review your mortgage application and verify your income, debt, liabilities, and assets with the documentation you have submited to get it ready for underwriting. If there are bad credit items that need explainations such as late payments, judgments, collections, tax liens, previous foreclosure and bankruptcy, we will require explainations and supporting documents. You will be communicating with a mortgage loan processor at this point.
Mortgage Application Process and Mortgage Processor
The processor will also order an appraisal, title, survey, insurance, and other pertinent items needed to proceed with your mortgage application process to the next level, which is underwriting.
The processor’s main job and goal is to have a complete mortgage package from the mortgage loan borrower so the underwriter will have no problem in issuing a clear to close and fund the mortgage loan.
Underwriting Process in the Mortgage Application Process
The next step in the mortgage application process is underwriting. Our underwriters are responsible will be reviewing the mortgage application package that was prepared by our processors. It is the underwriters job to verify everything on your mortgage application with supporting documents that you have provided and make sure that it meets the investor’s lending criteria. If the underwriter needs more information, the mortgage loan application will be place on suspense status until the underwriter receives the requested documents.
Once the underwriter feels that all the documents he reviewed corresponds with your mortgage application and all conditions are met, the underwriter will then issue a clear to close which means that the mortgage loan is ready to fund.
The loan processor will then contact the mortgage loan borrower and check on when to schedule the real estate mortgage loan closing.
The last and final process in the mortgage application process is the closing.
Closing in the Mortgage Application Process
The closing is the final step in the mortgage application process. The closing is scheduled after all mortgage conditions have been cleared and the mortgage investor certifies a full mortgage loan approval. The mortgage loan gets funded at closing via a cashier’s check or bank wire that is sent by the mortgage loan investor to a closing agent. The closing agent then disbuses the funds in exchange for the transfer of the title to the property. This is the final step of the mortgage application process. On a purchase mortgage loan closing, the keys are exchanged and everything is disbused on the closing date. On a refinance mortgage loan closing, the funds are not disbursed until three days after the closing due to the mandatory 3 day recission waiting period.
If you are interested in starting your own mortgage application process in California, Texas, Indiana, Kentucky, Florida or Illinois, please contact me at 262-716-8151 or visit me at www.gustancho.com .
Gustan Cho NMLS ID 873293