This BLOG On Steps In The Mortgage Process From Pre-Approval To Clear To Close Was PUBLISHED On May 29th, 2019
What are the Steps In The Mortgage Process after the pre-approval stage:
As the spring real estate market is in full effect, we would like to write an article for our followers of what to expect during the mortgage process and the Steps In The Mortgage Process.
- We have been receiving more and more phone calls from clients working with other lenders who do not understand the steps in the mortgage process
- The loan officers who work for Gustan Cho Associates Mortgage Group will keep you in the loop from start to finish during the Steps In The Mortgage Process
- Obviously, this is not the case with other lenders
- Or we would not receive the influx of phone calls regarding how the process should go
In this article, we will detail important Steps In The Mortgage Process.
Shopping For A Home After Getting Pre-Approved
Now that you have already been pre-approved, it is now time to go out shopping for a home.
- To avoid stress, buyers should understand the Steps In The Mortgage Process
- When you find the house you and your family like, you will then submit an offer
- With this offer, you and your realtor will detail the price you are willing to pay and negotiate any closing costs credits
- With today’s home values rising, asking for seller credit is more common than ever
- This will help keep more cash in your pocket and allow the seller to cover all or a portion of your closing cost
Once your realtor has drafted the offer up, you will submit it to the listing agent of that property. You will typically get a response within 24 to 48 hours regarding your offer. At this time the sellers may present you with a counteroffer.
Steps In The Mortgage Process After The Purchase Offer Has Been Accepted
Once Offer is Accepted
Congratulations! Now that your offer has been accepted you are on your path to homeownership. Gustan Cho Associates strongly suggests you complete a home inspection.
- While this is not a lender requirement, you are buying a long-term asset for a large amount of money
- It is important to know if there are any underlying issues with the property
- Please see our Home Inspection Blog for more information
- Keep in mind, a home inspection and home appraisal are two different things
- As mentioned above, we will not require a home inspection but, we will require an appraisal
- When the appraiser goes to the property, they are there to determine the value of the property
- When a home inspector goes to the property, they are there to confirm the condition of the property
- They are looking for things such as issues with appliances, leaky roofs, drywall issues, flooring issues, weatherproofing, conditions of windows, and electricity issues
The home inspector will go as far as flipping every light switch and turning on every faucet. They will even make sure the oven heats up properly. They are there to make sure you know what you are buying.
Steps In The Mortgage Process If There Are Issues With The Home Inspection
What happens when issues arise during the home inspection?
It is incredibly common for issues to arise during the home inspection process.
- When living in the home for many years you may not notice the issues, but a home inspector will notate any issues that need to be addressed
- Recently a client of ours had an issue during a home inspection with a faulty bathtub in the master bathroom
- There was a crack in the fiberglass of the bathtub
- The sellers rarely used the bathtub and did not notice the crack
- Of course, the buyer wanted to have the bathtub fixed prior to purchasing the property
- In this specific example, the real estate attorneys went back and forth and decided that a closing cost credit would be applied for the damages
- Meaning the seller did not have to fix the issue before selling the property
- They had a contractor come in and assess the damage
- Turns out the replacement of the bathtub was going to cost about $3,500
- An addendum was made to the sales contract for an additional seller credit of $3,500
- Once again, the seller did not have to fix the issue prior to closing
The credit allows the buyer to fix the issue on their own. If a home inspector notice is a leaky roof with visible drywall damage, that is a major issue that will need to be addressed before the house is appraised.
What Do Appraisers Look For When Inspecting The Subject Property
Home appraisers are looking for water damage during the appraisal process.
- A leaky roof is a major issue for appraisals
- In fact, this could kill the entire deal
- If the roof is not fixed prior to the appraisal, the appraisal will come back with a value “subject to” repairs
- The leaky roof and drywall must be fixed, and the appraiser will go back to the property to confirm the repairs are completed
- That must happen prior to the loan closing time
- As you can see, issues will arise during the home inspection
That is why it is important to protect your investment with an upfront inspection.
Mortgage Processing And Underwriting
Now that you are past the inspection time frame, typically five to seven days after the contract is executed, you are ready to focus on your mortgage loan.
- During the inspection process, loan disclosures will be sent to you
- The majority of these can be signed electronically with only a select few needing an ink signature
- You will return those disclosures to Gustan Cho Associates and we will then order your appraisal
- Once you have signed loan disclosures we will send you a file to underwriting
Typically, within 3 to 5 days you’ll have an underwriting conditional approval.
Conditional Loan Approval And Clearing Conditions For CTC
Once you have conditional approval, the loan processor will send you an email with the few items needed to receive a clear to close.
- You will then send in those items
- Those items typically consist of updated pay stubs or bank statements or a short letter of explanation
Those will then be sent back to the underwriter to get your official clear to close.
Getting Issued A Clear To Close
Now that you have received your clear to close, you can breathe a little easier.
- You will be sent a closing disclosure a minimum of three days prior to your closing date
- This will go over the final figures of fees and the amount you must bring to the title company for closing
- Once you have signed the closing disclosure there is a three business day waiting period before you can close on the mortgage transaction
During this three day period, you will want to visit your bank to get a certified cashier’s check or have them wire your funds to the title company.
Getting Closing Docs And Closing Date
Now you just need to show up to the closing table with those funds and a valid government-issued photo ID.
- If your identification is about to expire it is important that you have it renewed before your closing date
- A title company may not accept an expired ID
- You will now ink sign all pages you electronically signed on your initial application
- The term “sign your life away” applies to a mortgage closing
- You will sign your name many times at the title company
- Once you have completed signing, the title company will send the loan package back to us and we will fund your mortgage loan
At this time the keys are yours and you are now a proud homeowner!!
Understanding The Steps In The Mortgage Process
This process is incredibly exciting. Buying a home is part of the American dream.
- Gustan Cho Associates are excited to make this dream a reality for our clients
- Your loan officer will educate you on the mortgage process at the beginning stages
- It is important not to have your credit ran during the mortgage process
- Even days after closing this can cause an issue
- If you do need to open new credit it is important to contact your loan officer FIRST
- You may be required to sign an undisclosed debt acknowledgment form after the closing
- You can avoid this by not having your credit ran for a minimum of 10 days after your closing date
Our team is 100% committed to customer service. We strive on making this experience as easy as possible on you. If you have any general mortgage questions, please contact Mike Gracz on 630-659-7644. Or email Michael at email@example.com. Either Mike or one of the highly-skilled loan officers on the Gustan Cho Team will assist you in purchasing your home. Many of our clients come from last-second denials or bad experience with another lender. Please check out our reviews, they speak for themselves. We are available 7 days a week including holidays. Feel free to reach out with any questions!!