How Do I Obtain a Mortgage -TZ
The first thing you need to know is about the process known as pre-approval, this is when a loan officer works with a prospective home buyer to figure out how much they are eligible to borrow. The loan officer’s job is to review the borrower’s credit/liabilities, income and tax returns in order to find out how much they qualify to borrow as well as what kind of loan program they are best suited for.
Note: Not all borrowers go through the pre-approval process prior to shopping for a property. Though it is highly recommended because of the fact the prospective borrower will know exactly how much they are eligible to borrow. The borrower will also be taken more seriously on any offer they make with a full DU pre-approval.
The next step in the process involves a realtor working with the potential borrower, with the goal in mind of finding the right home to suit their needs. Once the property is found, a purchase offer is made to the seller (or the listing agent representing the seller). If the seller accepts the offer all parties will sign a purchase agreement/sales contract.
Note: If the borrower puts money down on a contract with only a pre-qualification and not a pre-approval, they may lose their deposit should the lender conclude that the prospective borrower is ineligible for a mortgage on the property.
At this point in time, the approval letter supplied by the lender is submitted to the listing agent and a deposit is to be escrowed with a settlement company. Entering the application stage, the borrower will have the option whether to lock in the interest rate or let it float. Click Here to learn about rate locks
The loan is now in the processing stage and the loan officer will work alongside a loan processor in gathering all necessary documents. Typical documents that are necessary to submit the file to underwriting include, title work, appraisal, insurances, survey and even a property inspection will be ordered. Just to name a few.
Once the processing is completed the loan-package/file will be sent to underwriting. The underwriter(s) will begin combing through the file and determine whether any additional information/documentation is needed. If the underwriter submits a conditional approval the loan officer must provide additional documentation or whatever condition is needed.
Once all conditions are satisfactory of the underwriter, the lender issues a final approval and the loan officer will contact the realtor and notify them that the loan status has been updated to “Clear to Close”. The loan processor now coordinates delivery of all the loan documentation between the settlement company and the lender. Once the loan documents been prepared the processor will coordinate the closing. After closing has been successfully executed, the documents will be returned to the lender and reviewed. At confirmation that all the documents have been received and signed correctly the lender will release the funds to the settlement company. The settlement company then disperses the funds to all parties indicated on the HUD closing statement and you are now a new home owner.