Our job is to make your journey down this road a smooth and relaxing one –
free of bumps, delays, and wrong turns. We promise to do our best to make your
ride a comfortable one. A good way to get started is with a brief description and visual
"roadmap" of what to expect during the loan application process.
Loan Interview
You meet with a loan officer to discuss financing options,
such as whether or not you want to "lock in" at a particular interest rate.
If you will be signing the loan with a co-purchaser, that person should also attend. The more information you can provide at this stage, the quicker your loan will proceed. But before you do anything else, complete, to the best of your ability, your
loan application form.
The kind of information you may be asked to provide includes:
- purchase contract on the house
- credit union account numbers, statements, and
credit union addresses
- pay stubs or W-2 forms – or other proof of employment and salary (tax returns, balance sheets, and profit-and-loss statements, if you’re self-employed)
- debt information, including loan and credit card numbers and creditors’
names and addresses
- canceled checks, money order receipts, or other evidence of mortgage or rental payments.
Loan Processing
Once you submit the loan application and other required information, we take care of the next
step, which covers verifications to setting up the closing. We’re mainly
interested in three things: the house you’re planning to buy (which serves as loan collateral) and your financial situation and credit history. Within three business days of receiving your application,
we'll send you a Truth-in-Lending statement, including the APR (annual percentage rate you’ll be paying).
Verifications
As part of the processing of your loan, we will verify all information on your application, including employment, deposit accounts, assets, liabilities, and so on.
Credit Report
We will order a report on your current credit status and past credit history, including monthly payments, current balances, and payment history.
Appraisal
We will arrange for an appraisal by a licensed real estate
appraiser (you are responsible for paying the fee) on the property being purchased or refinanced.
The appraisal determines the value of the property and thus its value. If the appraised value is less than the agreed-on purchase price, you may not be able to get as large a mortgage as you wanted, and you’ll need a larger down payment. With an appraisal contingency in your contract, however, sometimes you can renegotiate the purchase price.
Underwriting
After all information on your application is provided and verified, the application goes to underwriting to assess the risk. An underwriter looks at four major factors: employment/income, assets, credit history, and value of the home. Based on the underwriter’s findings, we recommend approval, ask you for more information, or reject the application.
Approval
Once we receive all of your documentation, we prepare your loan for final approval. We usually issue preliminary approvals within XX days. When we approve your loan, we send you a commitment letter, or formal loan offer, laying out the amount and terms of the loan. You’ll have XX days to accept the loan offer and close on the loan. Signing the commitment letter means you accept the terms of the loan.
Closing
The closing date is set after you’ve accepted the commitment letter. Be sure closing takes place before the expiration date of the commitment letter and any rate lock-in.
The closing is the meeting to finalize the property sale, issue the mortgage, and, typically,
turn over the keys to your new home. During this final step in the loan application process, all relevant documents are signed, and you pay various settlement costs with a cashier’s check. Here are steps that should be completed
before the closing:
- You will need to have had completed a title search, a survey, and a
pest inspection.
- You will need to have purchased homeowner’s insurance.
- You will need to have specified type of ownership, such as sole ownership,
tenancy by entirety, joint tenancy, or tenancy in common.
- You’ll need to provide a homeowner’s warranty (for
new construction).
- You’ll need to provide a certificate of closing.
- You should have completed a final walk-through inspection no more than 24 hours before closing.
- For a final estimate of closing costs, you can inspect the HUD-1 Settlement Statement one day before closing.
Closing documents include:
- HUD-1 Settlement Statement
- Truth-in-Lending statement
- Mortgage note
- Mortgage
- Affidavits
- Deed
Fees you are responsible for:
- Loan origination fee
- Loan discount points
- Appraisal fee
- Credit report fee
- Assumption fee
Advance payments or prepaids:
- Interest
- Mortgage insurance premium
- Hazard insurance premium
Loan Servicing
After closing, your loan becomes a "mortgage" as it moves into the loan servicing function. This is when you begin making monthly mortgage payments to pay off the loan.
During the life of the loan, you can contact us for information about your balance, and with any other questions about your mortgage.
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