The Mortgage Process
Many new homeowners are in the dark when it comes to an understanding how the mortgage process works. Being bombarded with credit checks, asset verifications, identification, tax returns and pay stubs, it is a sometimes invasive and overwhelming process. Knowing what to expect, how it starts and how to complete it can help ease the first time homebuyers anxiety and will make the process seem more comfortable.
The Application process
Your lender will help you complete the loan application process once you have decided on a mortgage institution. A list of required documents you need to submit either in person or through a secure website is one of the first steps in the process. During the pre-qualifying process, you may have provided documents to pre-qualify you for the mortgage price you agreed upon to purchase the property. Please know, there may be other documents needed as the process continues.
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Your lender will review the completed application and verify or confirm all information you have provided and will provide you with documents to help understand the process better.
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A loan estimate will best estimate your closing costs. It will explain the number of fees needed to process and close the loan. It will also include mortgage insurance, title insurance and any other expenses you are required or may have elected to have.
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The loan estimate will indicate the finance charge, annual percentage rate(APR), number of payment, amount of each payment you need to make and the total amount you will pay in principal and finance charges for the life of the loan.
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Commitment Letter
Commitment Letter
When you receive the commitment letter (the promise your lender is making to you to create you a loan. This letter will include all specifics of the loan(amount, terms, interest rate).
At this point, your lender will order these documents:
- Property appraisal
- A property appraisal is requested to estimate the property’s market value and ensure the lender provides the maximum loan amount based on the purchase price or appraised value.
- Credit report
*If you do not have traditional forms of credit, you will need to provide evidence of your ability and willingness to repay debts, such as money order receipts or canceled checks from the payment of rent and utility bills.
Underwriting
Your lender creates a file and sends it to the underwriter. The underwriter has a significant role in the mortgage process to ensure all loan requirements are met. If they require more information, it is critical that all documentation be submitted to keep the underwriting process moving along. If the loan is approved with conditions, there will be additional information that must be provided at the closing before the loan becomes final.
Pre-Closing
When the loan is approved title insurance will be ordered, and the closing will be scheduled.
The Closing
The lender will want to ensure the value of the home is protected because the property is the security for the loan. The homebuyer must order homeowners insurance through the insurance agent of their choosing to cover any damages that may occur. This insurance will protect against weather, theft, or fire.
With over 50 years experience as an attorney, Richard S. Weinstein assists clients with the important financial situations in their lives. Whether you are dealing with bankruptcy, real estate (both commercial and residential, including short sales, foreclosures, and title insurance), estate planning, probate, business formations, or sales or mergers, Richard S. Weinstein is the attorney with the education, experience, and knowledge you need! Call us at (561) 745-3040 or visit his website at rweinsteinlaw.com.
Law Office of Richard S. Weinstein, P.A.
250 S. Central Blvd. #101
Jupiter, FL 33458
(561) 745-3040
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