If your picture of the mortgage loan process includes stacks of papers, spreadsheets, tax forms, and a credit history that goes back to your newspaper route at age 12, some perspective might be in order. To help make the process as easy as possible, it’s important that you are prepared for the information that will be asked of you.
- Application—In today’s competitive housing market, it’s critical that you get pre-approved for your loan before shopping for a home. Once you’ve completed the loan application, your lender will verify all of the information you provided. Be prepared to show proof of income with pay stubs and tax returns. Your credit report is also reviewed as part of the application process.
- Loan Estimate—Shortly after you apply, your lender will provide a loan estimate, which is their best estimate of your closing costs, including lender fees, mortgage insurance, title insurance and recording fees. It also includes the annual percentage rate (APR), number of payments, amount of each payment and due date, late fees and total amount you will pay over the life of the loan.
- Ordering Appraisal—Next, your lender will order the property appraisal. The appraisal estimates the property’s value, which dictates the maximum amount the lender will loan for that property.
- Underwriting—An underwriter reviews your loan file to ensure that all requirements are met. The underwriter may either approve the loan as-is or approve it with conditions, requiring that you provide additional information prior to closing.
- Pre-closing—Once the loan is approved, title insurance is ordered, approval contingencies are met and the closing is scheduled. A Closing Disclosure (CD) is issued showing what the final estimated charges will be for your loan. Review the CD closely for accuracy.
The key to success is building a strong relationship with your mortgage lender from the start and maintaining close communication throughout the process. Learn more by talking with a Verity representative or by visiting veritycu.com/mortgage.