The mortgage loan process differs from person to person. Everyone is different. Some clients have clean files that flow through quickly, whereas others require a little more detail. Make sure you work with someone like me who can help you navigate this sometimes tricky, confusing, and gut wrenching process.
This article should clear up some common questions that you have about the mortgage loan process to obtain a home mortgage.
This actual mortgage process begins when a contract on a home is signed, and you must obtain mortgage financing.
Before meeting to sign the mortgage loan application, we will discuss what financing scenario you will choose. Each clients needs are different, and together we will figure out which mortgage loan option is best for you.
After you select the various options for your loan (loan type, loan amount, down payment, etc), we will lock the interest rate in for a certain period of days called a "Rate Lock". Typical rate locks are good for 30/45/60 days. Longer locking periods can be discussed if necessary.
Once the rate is locked in, you will need to begin preparing documents to provide for the underwriters to review. These items vary from client to client, but usually include: 30 days most recent paystubs, 2 years most recent W2's, 2 years most recent tax returns - all pages and schedules, 2 months bank statements (all pages), payment method for appraisal fee, and any other applicable documents. These additional documents could include: Proof of receipt of child support, child support documents, divorce decree, bankruptcy documents, etc. We will discuss what is needed from you prior to meeting to sign the paperwork.
Whenever you feel that you have most of the items needed for the loan, we have a few different options to sign the mortgage loan paperwork. These include: Meeting in person, overnighting via FedEx, or electronically signing on the computer (Docusign).
After the loan documents are signed, and the initial documentation is provided to me, we will move into the next stage of the loan process.
The credit decision - initial to final approval
Once the mortgage loan documents are signed, and the initial documentation provided, I give all of this information to my mortgage loan processor. The mortgage processor is the one in charge of processing your loan. This entails piecing all of the information together. Obtaining verifications of employment, and more. Your appraisal is also ordered at this time.
After the processor feels that he/she has enough information verified, they will submit the loan to the underwriter to make the initial credit decision. This is also called "Conditional Commitment" or "Initial Approval".
Many people have the misconception that the initial loan approval means that the loan is totally approved. There is actually one more step in between initial loan approval and final approval.
When the initial loan approval is issued I will contact you regarding any remaining documentation that the underwriter is requesting. It is very common to make a few requests for additional documentation, but each client is different.
As soon as the appraisal is completed, a copy will be sent to you for review. The appraisal contains information on your home (such as the value), along with comparable sales of neighboring homes, and lots of photos.
Once this additional documentation is obtained from you, we will submit for final loan approval. Once the final approval is issued, the term is "Clear to Close", meaning a closing date/time can be scheduled.
Closing on your new home
The final stage of the loan process is after the "Clear to Close" is issued. I will notify both the buyer and sellers agent, as well as the settlement company of the great news. They will then contact all parties to arrange a time, date, and location to meet for the mortgage loan settlement.
Shortly after the clear to close is issued, the loan will work its way through our closing department. During this time the final documents are prepare, along with the deed, mortgage note, etc. They will also finalize all of the numbers so that you will be able to obtain a cashiers check for a final amount.
Once the final numbers are approved (this is called the HUD-1 Settlement Statement), I will contact you with the dollar amount and name of the settlement company to make the cashiers check out for. Cash and credit card are not allowed. All funds must be provided in the form a cashiers check.
On the date of closing, make sure to bring your photo ID and the cashiers check to closing. Also make sure that your writing hand is well rested, as you will be signing and dating more documents than you can ever imagine.
Move into your new home and enjoy all that you have earned.
After the closing
My help and services don't stop after you close on the loan. You can contact me anytime with questions or if you need any help.
Within 30 days of closing, you will receive information in the mail from the new loan servicer. As a correspondent lender, my company does not service mortgage loans, as we usually sell or assign the servicing elsewhere. When you receive this information in the mail, you can select your method of payment (online, check, etc), along with other details (such as escrow balances, loan balance, etc).
After some time in the home, you may want to make improvements, or pay off debt. You can always contact me regarding a cashout refinance, or a simple rate reduction refinance.
John Cushma is a hands on Loan Officer from start to finish
For informational purposes only and is not a commitment to lend. Programs, rates, terms and conditions are subject to change at any time. Availability dependent upon approved credit and documentation, acceptable appraisal, and market conditions. Not all programs available in all areas. CrossCountry Mortgage Inc. is a Pennsylvania Corporation headquartered at 22 Rutgers Road, Pittsburgh, PA 15205. NMLS# 1423174 #3029; www.nmlsconsumeraccess.org; Equal Housing Opportunity.