Guide to the Mortgage Process
The first step is simple; you need to apply. Contact me if you want more information
before you begin. We need your financial information to process your application:
your current mortgage or rent, your other loans, your income, your assets, etc.
How you start is up to you. You can apply on-line here, or if you prefer, stop by
my office and take care of the paperwork in person. If you are short on time you
can apply over the phone. Remember, I can help you with any part of the loan process.
2. Preliminary Approval
Within 3 days (usually less) we'll have an answer for you. This answer is be based
on the information you give us and our work to match you with the best possible
financing source and mortgage product. I can present you with your options and explain
every detail at this point.
3. Loan Processing
We need to make sure you understand what's going on and its financial implications;
this is a big decision! I will be there to help you if you have any questions. As
you might guess, we need paperwork completed and signed before we can go on. It's
always a good idea to make copies of forms to keep for your records. Here is a summary
of the forms involved:
- Good Faith Estimate of Settlement Costs - Shows you all related charges and fees
for getting a mortgage.
- Truth in Lending Disclosure - This lets you know what your estimated annual percentage
rate of interest (APR) will be and any other program features that apply.
- Borrowers Certification - This authorizes that all the information you provided
is correct to the best of your knowledge. It also lets us finalize the process by
contacting your landlord, employer, mortgage company, etc. and getting your credit
Next, we'll arrange an appraisal of the property to determine its fair market value.
The appraiser will visit the property and compare its features, floor plan, lot,
etc. against other similar properties in the area. (You'll receive a copy of the
appraisal at closing.) We also obtain a title report (an attorney's opinion) at
this time. This will tell us the legal details of the property including liens against
it (i.e. another loan).
5. Final Approval
Now it's time for the underwriter to step in. Basically, an underwriter looks over
all the paperwork and loan details and agrees that it supports the preliminary approval
issued in step 2. What do they look for? Here are a few key items:
- The Property: They review the appraiser's report of the property's value.
- Total Debt Ratio: The ratio between all your sources of income against all your
debts indicates whether you can afford the payments.
- Cash Reserves: After your loan settlement costs are paid, this is the amount of
money left over in your bank account. You'll still need cash to live on until the
next paycheck comes.
- Credit History: Looking at your past debts and payment history is a measure of
how likely and able you will be to repay your loan.
- Employment History: This isn't only how much you make now, but how stable your
income tends to be.
You're finally here. The last pile of paperwork. But don't worry - it's the closing
agent's job to explain everything to you so that you know what you are signing.
If you like, I will try to arrange to be there as well. Our closings go quite smoothly
because we make sure everything is in order on our end, and we keep you educated
about the process. This is when you will be expected to take care of the closing
costs, and the balance of your down payment.
For more information: