Overview of the Mortgage Loan Process

Make no mistake, there’s a lot involved in getting a mortgage loan. You wouldn’t be here on our website if you could fill out a one-page application and get the best loan for you funded the same day. What’s more, the recent banking crisis has led the lending industry to tighten lending criteria, increasing the challenges of getting a mortgage.

We do our best to do most of the heavy lifting for you, so you can concentrate on what’s important — preparing to move into your new home, saving money, or making plans for the equity you converted to cash.

There are three main steps involved in getting a loan. You’ll see that we’ve made your part in them as easy as possible. That’s what we’re here for!

Step 1: Get Pre-Approved
(skip if refinancing)

It’s extremely important to remember that the mortgage industry approves you for a monthly payment amount, not a mortgage amount or purchase price. Ever hear of a “housing ratio” or “debt-to-income ratio”? These terms refer to how much of your monthly gross income does it make sense to allow you to spend on the Principal & Interest of a loan, plus monthly amounts for property Taxes, home Insurance and association fees. This amount is also referred to as a monthly PITI.

Once the PITI amount is determined from your income and debts, the current interest rate, estimated property taxes and your down payment funds are used to estimate a purchase price for you to shop with. An estimated purchase price is the best we can do at this point as we have no way of knowing exact property taxes until you select a home. If taxes are too high, you may not qualify for that specific home.

A word of caution — you should know your monthly budget better than any mortgage person. YOU should determine how much you want to spend monthly on a housing payment. Leaving it up to a mortgage person may cause you to get in over your head and lead to foreclosure.

To get Pre-Approved you’ll need to answer the questions on our purchase online questionnaire and supply a list of information. Email or call us if you need assistance.

Step 2: Apply for your Loan

Once you’ve signed a purchase contract or decided to refinance, you’ll need to sign a formal mortgage application.

If you’re refinancing, we make this as easy as we can for you by having you send us a list of information and complete our refinance online questionnaire. We use this information to complete the application on our end and send it to you. All you have to do is sign it and send it back, or you can meet with us to go over it.

Please note, even if you’ve already given us the required list of information for your pre-approval, it may need to be updated or expanded upon, so please be patient with us. We don’t ask for anything we don’t need.

Step 3: The Approval Process

The following is a general idea of what will occur after we receive your signed mortgage application. Most loan applications take approximately thirty (30) days to bring to closing. Time is of the essence, as the success of meeting your targeted closing date depends on your prompt cooperation.

File setup: Days 1-3

• Credit Report ordered or updated if necessary.
• Validation of monthly income, debts, and liquid assets is addressed.
• Automated Underwriting System (AUS) is accessed if loan program allows.
• Appraisal, Title Binder & home insurance ordered/requested.
• File reviewed for completeness of Borrower(s) information.

Processing: Days 1-14

• Items missing and/or ordered are tracked until received.
• File reviewed for completeness, sent to underwriting when ready.

Underwriting: Days 14-21

• An unbiased expert called an Underwriter (UW), reviews accuracy of data & calculations to make sure they meet the guidelines of the loan program applied for.
• Application is Approved, Conditionally Approved, Suspended or Rejected.

Approval: Days 21-26

• Notice of approval is sent to Borrower(s) and Realtor(s) as necessary.
• If conditionally approved or suspended, missing items/clarification are obtained and file resubmitted to Underwriter.
• Process repeats until Clear-to-Close received.

Closing Documents Prepared: Days 26-29

• Interest rate, lock and fees are reviewed.
• Items required by Underwriter at closing are reviewed.
• HUD-1 prepared by title agent. Timing issues usually arise here because title agents often wait until the day of closing to prepare this form, even though they usually have the documents 24-72 hours ahead of time. We try our best to estimate the amount due/paid at closing for a Borrower(s), but the title agent actually has the final word.
• Borrower(s) sent slim closing package to review.

Closing: Day 30

• All final documents & funds are delivered to title agent.
• Borrower is required to present to title agent, proper identification, all required “at closing” items and if required, certified funds.
• Borrower(s) sign all documents and title agent notarizes applicable documents.

Funding: Day 30

• PURCHASE: All funds dispersed immediately.
• REFINANCE: Federal law requires a three day rescission period during which Borrower(s) may review the loan parameters and cancel the transaction if dissatisfied, only on primary residences. Second homes and investment properties fund immediately.

Step 4: Follow up

You answered a few questions, gave us some detailed information, applied online, and next thing you know, you’re done!

We’re in the business of mortgage loans, you’re not — so we did most of the work. Doesn’t that make sense?

Now we’re not going to drop the ball at this point. We’re going to make sure we stay in touch and answer any questions that may come up on your end. We want your repeat business and personal introductions to your family and friends looking to buy a home or refinance. We plan to earn those.