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a mortgage for a new or resale home purchase can seem more
complicated than it really is. Here are the six steps that your
mortgage company or bank will undertake from the moment you request
a mortgage to the point that you take possession of your new home: Step #1: The Mortgage Specialist Your first contact will undoubtedly be with a trained mortgage specialist whose role it is to analyze your income and assets, match your finances and homeownership goals with the appropriate loan product, and help you complete the paper work required for your loan application. Your mortgage specialist will also "supervise" your mortgage application as it proceeds through the approval process, and is available to answer any questions you may have. Step #2: The Loan Officer Once you have completed your mortgage application and provided some or all of the necessary documentation to your mortgage specialist, your file will then be submitted to the loan officer. The officer's goal is to get your loan approved quickly, and with a minimum amount of difficulty. He or she will, therefore, review the documents in your file to determine your eligibility for mortgage approval. The processor may need to verify some of the information in your file, or may note a missing piece of documentation, or decide that obtaining certain additional information will make loan approval more likely. During this process, the processor will undoubtedly call you and your co-borrower. If you provide a timely response to his or her requests, the process will go more quickly. You will also be informed if there is a problem with your application. Step #3: The Appraiser If you have already found the home you wish to buy, your bank or mortgage company will order an appraisal on that home as soon as you apply for your mortgage. If you have not yet found the home you wish to buy, your loan will move to Step #4, and the appraisal will be ordered later. In either case, a professional appraiser will contact you or your real estate agent to set up a visit to the property. Based on the visit and an analysis of comparable properties in the area which have recently sold, the appraiser will determine the market value of the property. Certain mortgage programs require the appraiser to specify anything which must be done by the seller prior to closing to bring the property up to acceptable standards. Step #4: The Underwriter Once your mortgage is fully processed, the underwriting stage usually goes very quickly. If the underwriter agrees that you are a good candidate for a mortgage, he or she will prepare a commitment letter, which you as the borrower will be asked to sign. The commitment letter contains the terms and conditions of your mortgage which will need to be satisfied before you close on the property. Step #5: The Title Search A title search will be ordered during the process from either the title attorney or title company of your choice, or one chosen by your bank if you have no preference. A title search is a review of public records and the preparation of a report detailing the property's history of ownership. When the search is complete, the attorney will provide a mortgage title insurance policy that protects the lender against losses due to a faulty title. You also have the option of purchasing your own coverage. Step #6: The Mortgage Closing...Congratulations! When all the conditions in your commitment letter have been met, and the title search is complete, a date will be set for the closing. You, your real estate agent, the seller and, if customary, your attorneys, will meet at the closing agent's office to complete the sales transaction, which will include the signing of many legal documents and the payment of various funds and fees. Your financial partner may help prepare you for this important day. Feeling comfortable and informed will help make buying a home and securing your mortgage a smooth process. Article: An Introduction To Mortgages Article: Before Buying, Focus Your Financial Picture
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