1. Loan application
It is highly encouraged to get pre-qualified for a mortgage even before you start to look for a home. This way, you know the price of the home you can afford and should be researching. This requires information about your income, assets and the type of mortgage you’re applying for. It’s important to supply requested information in a timely manner to ensure quick mortgage approval and a smooth home buying process.
2. Mortgage Planning Session
This is a face to face meeting to ensure you are well educated on all the details of financing your new home and gives you an opportunity to ask any questions you may have.
3. The Hunt
You can now begin to look for your new home with your real estate agent. Once you have found the right one, your REALTOR® helps negotiate the terms of the sale, including price, possession date and any seller’s concessions, if applicable.
4. Sign Mortgage Disclosures and Lock Interest Rate
Once your offer is accepted, your Mortgage Application and Loan Estimate is revised to reflect the details of the real estate contract. Locking in an interest rate should be discussed.
5. Processor’s Review
A loan processor performs a final review of your mortgage request; making sure all documents are collected and filled out correctly. Your mortgage packet is then forwarded to the mortgage company for final loan approval.
There are a variety of inspections: whole house inspection, radon, termite, and if applicable, well and septic. Your agent is a valuable resource in learning more about these inspections.
Mortgage companies require an appraisal on all home sales. The appraisal justifies the price you will pay for your new home. In the unlikely event the home does not appraise for the purchase price, you may have the ability to renegotiate your purchase agreement.
Mortgage companies require fire and hazard insurance on the replacement value of your new home. Flood insurance is also required if the property is located in a flood zone. Please contact your insurance provider as soon as you have a finalized offer.
9. Abstracting/Title Opinion
The abstract is a document that shows the property history and any liens it might have against it. Liens consist of mortgages, judgments, mechanic liens, etc. An attorney provides a title opinion and requires all liens clear to convey clean title before closing.
10. Underwriter’s Review
Based on the information sent by the loan processor, the underwriter makes the final decision to approve your mortgage. At this time additional information may be requested before final loan approval is granted.
11. Full Loan Approval
The underwriter gives the final approval for financing and the closing time and location are chosen.
Final mortgage documents are reviewed and signed. This takes approximately one hour. If you’re required to bring funds to closing, a certified check is required. Your photo ID is also required.