The Mortgage Process

The Mortgage Process doesn’t have to be a mystery. Here we have explained the process so that you can feel comfortable and know what to expect.

Preparation:

Before you start the online application, it is easier if you collect the documents and information you need. You will need information about your employment, your income, your housing/rental history, and the assets you own (i.e. bank accounts and retirement accounts). You may not need all of the information listed below, but it’s better to be prepared.

Income Documentation needed (copies of the following):

  • Most recent two (2) year’s of Tax Returns (ALL pages and Schedules)
  • W-2’s, if applicable, for each year
  • Most recent two (2) month’s banks statements (ALL pages, even if blank)
  • Most recent Quarterly statements for retirement / pension accounts (ALL pages, even if blank).
  • Other Considerations:
  • If divorced, copy of the Divorce Decree (all pages, include alimony, palimony and/or child support info, if separate)
  • If you have filed for Bankruptcy in the past 3-10 years, please note
  • If you have a Foreclosure in the past 4 years, please note
  • Assets:Your lender will want proof that you have reserves to make payments regardless of your employment status, as well as having enough money available at closing.
  • Money for Closing: If you are required to bring funds to closing, then your bank or asset statements will need to demonstrate that you have sufficient funds in your accounts. These funds should have been in your account at least 60 days prior to qualifying for your loan or a letter of explanation will need to be provided sourcing the deposit.  Your two months bank statements will show this. By explaining the situation to your mortgage professional, you can obtain the correct documentation up front rather than trying to correct a problem later.
  • If you have changed employers within the last 2 years, a verification of employment letter will be sent to your current employer. The phone numbers for the Human Resources offices for your employers during the past 2 years will be required.

Submitting and Processing Your Application

Honestly the easiest, most efficient and safest way to complete your loan application is to complete your application online by clicking the Apply for a Loan button. When you click the Apply for a Loan button you are sent to a secured URL address that protects your documentation and information. This way your information and original documents never leave your home or office, wherever you may be completing the application. Additionally, later in the process when you use the provided Fax Cover Sheet, all your documents are delivered to us and go directly into your personal loan file. This significantly reduces the handling of your documents and the potential for loss or theft.

Once you enter this information and submit your application to me, my Loan Assistant will contact you for any missing information and to advise you of the initial income and asset documents we’ll need in order to submit your loan for approval. After I have a full application, I will quickly review your information and prepare loan options that match those specific goals for you and I to discuss. After you’ve chosen a loan program, your Disclosure documents will be prepared and sent to you via secure email for your e-signatures. If you choose, we can go over them in my office.

Processing your Application:

This part of the process will take between 1 and 3 days. My Processor will review your application and all corresponding documentation, review your income and pre-underwrite your loan, prior to submitting it to Underwriting for approval.

Underwriting Your Loan:

This part of the process can take from 1 to 3 business days. Underwriting is the process by which the Underwriter looks at the application and decides whether the loan makes economic sense or not. If it makes sense, they will issue a conditional approval.

As soon as your mortgage banker lets you know that there are outstanding conditions to clear, be sure to get the information or take care of the tasks immediately. If you delay in providing any conditions, your closing may be delayed as a result. So, act quickly.

Some examples of conditions can be:

  • Verification of Employment
  • Proof of where the funds in your bank account came from
  • Explanation of late payments
  • Explanations of gaps in employment
  • Past account collection issues When all of the conditions are cleared, a “clear to close” is issued and the closing may be scheduled a few days later. Closing cannot be scheduled until all of the conditions are cleared. Please keep this in mind when you are wondering when the closing will be.
  • If you know about some of these things, and can provide letters, proof and other appropriate documents and information in the beginning of the loan application process, it can speed up the process considerably.

Once received, the Underwriter can usually clear conditions within 1 to 2 days and issue a Clear to Close.

Closing:

This is an exciting time; your mortgage application has been approved and everything is ready. Your mortgage professional will provide you with your final HUD Settlement Statement, showing all fees and any money you are required to bring to closing.

As stated during the signing of your application, make sure that you review the papers that you will be signing and ask any questions that you may have. It is also a good idea to bring the Good Faith Estimate (GFE) you received so that you can compare with the closing papers to make sure that all of the costs presented match the closing papers.

Summary:

The mortgage process can be confusing and lengthy, if not managed by a true mortgage professional with the knowledge and experience to assist you. The Loan Officer is key to making your mortgage approval and subsequent closing an easy, comfortable experience. Go with your gut and don’t be swayed by low rate advertising or other marketing ploys. If your Loan Officer can’t get you approved and your loan closed in a reasonable time, find another one.

If you are ready to apply for a mortgage, begin your application here.