what to expect during the mortgage process
Buying a home isn’t as easy as it used to be thanks to a crashed housing market and a flurry of foreclosures that have swept the nation. In order to protect the banks and to prevent borrowers from getting in over their heads, the mortgage process has been significantly beefed up. If you’re looking to apply for a mortgage but the overall process seems daunting, don’t be intimidated. While in depth, the home buying process can be relatively stress free if you’re properly prepared for everything it requires.
When you apply for your mortgage initially, you’ll provide your mortgage broker with a variety of pay stubs, your most recent tax returns, bank statements, and additional financial documents to get a ballpark estimate about what you’ll be approved for. You can get pre-approved from a few different companies so you can comparison shop and see who might be charging you unnecessary fees. It also helps you get better rates and lower closing costs when you have mortgage companies competing against each other for your money. Just remember a pre-approval doesn’t guarantee you a loan; it merely provides you with a good faith estimate to let you do your house shopping within your means.
When you submit your formal application, your mortgage broker will submit a credit report request within 24 hours. From there, your debt to income ratio will be examined, as will your debt repayment history. At this point, you’ve most likely found a house and had an accepted offer, so the bank will also put in an appraisal order on your house to ensure that the value of the house meets or exceeds the amount of the loan you’re requesting. They’ll also perform an employment verification and check to make sure your bank holds the proper amount of funds to close. Your broker will then assemble all of the paperwork and submit the package to the underwriter.
While their job title sounds a bit foreboding, the underwriter is the person who checks for any discrepancies in the application. Once the underwriter has the package in hand, approval can take from 24 to 72 hours. The underwrite works to protect the bank from applicants who may make false claims on their applications. Your credit history will be checked again, as will the appraisal to make sure your loan amount matches what the house is worth. The underwriter will also evaluate your debt to income ratio to make sure your already existing debts plus a mortgage won’t mean you’ll be in the red before you even buy a house.
When the underwriter gives the all clear, the title and deed are drawn up and sent to the title company. This usually takes 24 hours to three days, and then you’re free to come in and sign your loan documents. Once the documents are signed, they’ll be submitted to the bank, who will review the package and approve it before writing a check. Once it has been recorded publicly, escrow is officially closed and you’re a homeowner.
If you have all of your ducks in a row, the mortgage approval process isn’t that big of a deal. Find a trusted mortgage broker and they will be able to lead you through the entire process with minimal stress and road bumps.
At BuyFloridaRealty.com we specialize is residential real estate services. If you have any questions about buying or seller a home, or would like more information regarding home financing, please give us a call or contact us today.