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< What to Expect
| What to expect |
Buying a new home is an exciting time. It could be the most important purchase you will ever make. You may requre financing to make your dream home a reality. So you begin the process of applying for your mortgage.
As your lending institution, we will assign you a loan officer. The loan officer will be your guide through the mortgage process, from application to the final funding of the loan. The officer will answer questions you may have, keep you advised of your loan's status, and help you organize any final information required by the lender. You can expect the mortgage process to take about two to four weeks from start to finish.
Upon request, express closing are available at no additional cost.
Four basic steps define the mortgage process. They are interviewing and qualification; processing; underwriting; and closing. These steps are explained in more detail in the following sections.
Step 1: Interviewing and Qualification
Your loan officer will lead you through the preliminary qualification questions. Your answers will help the officer determine your loan needs and recommend which of the many loan programs available would best suit your purposes. Two ratios provide the information necessary for this analysis.
Housing-to-income ratio compares all monthly housing expenses in relation to the monthly income available.
Total debt-to-income ratio compares all monthly debt payments such as car payments, housing debts, and credit cards, in relation to monthly income.
Once the preliminary qualification is completed, you can start the actual application. very comprehensive information is required about yourself and the subject property for the application. It may seem a little strange disclosing such personal information about your financial position but rest assured, mortgage professionals deal with highly confidential information everyday. It is imperitive that you give truthful and complete answers to enure that your loan application and procesing goes as smoothly as possible.
You will probably be asked to provide supporting documentation such as bank statements, W-2's, paystubs, etc. you will also need to sign documents for verifications that will be needed during processing.
The loan officer will give you a Good Faith Estimate of the settlement charges for closing your loan, a Truth-In-Lending disclosure that provides the APR (cost of the mortgage as an annual rate) and estimated payments, and a settlement booklet. The settlement booklet explains in great detail the fees involved with a mortgage loan.
Step 2: Loan Processing
Your loan file will then go to a loan processor who will make sure all the information is accurate, complete and meets certain marketing requirements. The loan processor will order credit reports, appraisals and verifications. When the file is complete the processor will send it on to underwriting.
Step 3: Underwriting
The underwriting process determines whether or not your loan will be approved. An underwriter will review all your documents for completeness and accuracy. The loan file is then analyzed for four important factors: collateral, capacity, character and capital.
Collateral is an estimate of the property's value and physical condition. This amount allows the lender to determine the maximum loan amount for the property.
Capacity is the financial resources available to you and your ability to make monthly house payments. The qualifying ratios are also analyzed.
Character
