The New Home Mortgage Loan Process 
Even experienced home buyers sometimes find the home mortgage process hard to understand so we've put together a short explanation of the process to make sure you understand everything you need to know about this important transaction.
Pre-Qualification - This is where it all begins. Your mortgage consultant will gather information about your income, debts, and other details and give you an estimate of how much you can afford to borrow. They'll help identify the different programs available that could result in different pre-qualification loan amounts and help you pick the ones that make the most sense in your situation. They'll also order a credit report and run your home loan through an automated underwriting system to verify their estimates.
Loan Application - Now comes the application. Once you've pre-qualified your loan consultant will likely want to prepare a formal loan application. They'll also verify employment, your income, any bank deposits, and gather whatever other documents are needed for processing your application. Many times this process can be done right over the phones if a face to face meeting isn't convenient.
Processing - Once you've completed the application your consultant will review your credit reports and verify your current debts and payment histories. If there are any negative items on your credit report like late payments, collections for judgments or other concerns, they'll probable want to get a written explanation from you to send to the lender by way of clearing up any of these types of issues. They also, arrange for an appraisal of the property and review it's value as well as order the title insurance and homeowner's insurance estimates. The complete package is then assembled and submitted to the lender for final approval.
Underwriting - Once it goes to the lender it is sent to the underwriting department where they make sure your home loan package meets all of the lender's requirements. At this point you've probably gathered all the information they'll need, but in some instances, you may need to provide additional information. Your loan consultant will work with you and the lender to help ensure that approval happens on time.
In most cases if your down payment is less than 20% of the purchase price the lender will require you to purchase Private Mortgage Insurance (PMI) to protect the lender in case of default. Typically PMI is paid monthly but in some cases it can be financed in with your loan or paid upfront at loan closing. In addition, you may be able to eliminate PMI after a few years if your home goes up in value enough to provide the needed 20% equity margin.
Closing - Now comes the exciting part. Once all the underwriting is finished and your home loan is approved, the package is complete and a closing date and time are scheduled.
If your interested in getting additional information on the loan process or buying your new home simply contact us and we'll be happy to help.
