Mortgage Process: What to Expect

Creating realistic expectations means the mortgage application process goes smoothly for you, as well as your lender. While each situation is a little different, here’s what you can generally expect during the mortgage process with MBA Mortgage Services.

Prequalifying for a mortgage loan

  • Before you start shopping for a new home, you should meet with your lender and obtain a prequalification letter.  A good loan consultant will interview you to determine the loan amount for which you qualify.  This will involve your income, current debt, employment history, your credit, and other factors.  Most lenders will ask you to pay a nominal fee for the report — it should be less than $20 — and the cost should be credited to you at closing.

  • Bring identification, your social security number, addresses for the past two years, and employment information for the past two years with you to this meeting, so your loan consultant can pull your credit report and obtain your credit scores.  You can read more about credit here.

  • Your loan consultant will advise you as to which loan products are best for your situation and should offer you choices in what product you can select.  You don't have to make this decision today, but you should think about it before your next lender meeting.

  • Once you know the maximum for which you can qualify, you'll want to think about how much you actually want to spend.  Most home buyers today want to spend less than the maximum in order to maintain a cushion for future emergencies.

Now you're ready to go shopping!

  • Unless you already have a home selected, you should consider working with a licensed Realtor to select a home.  A Realtor will have access to the Multiple Listings Service and other resources that'll ensure you'll be able to see virtually all of the homes available in the area you desire.

  • A good Realtor will help you create an offer that's more likely to be accepted, including seller concessions on the sale.  They'll also be able to advise you about area schools, provide you with local information (important if you're moving to a new town), and help protect your interests in the sale. 

  • Once you've selected a home, your Realtor will write up your offer contract and act as liaison between you and the seller or seller's agent.  There'll likely be negotiations after your offer is made, and your Realtor should stay in touch with you during these negotiations.

  • Included in your purchase agreement will be a provision for a closing date.  This is typically considered the latest possible date the seller is willing close.  Your lender should target a date at least 3 or 4 days prior to the specified date in the purchase agreement.

Moving on to the loan application

  • Once you and your Realtor have an accepted offer and bilateral purchase agreement, it's time to begin the paperwork for your loan application.

  • You should gather the required documents that your lender needs to support your application (see the list here) and bring them with you to this meeting.

  •  You'll be required to complete a Uniform Residential Loan Application, a sample of which can be found here, and you may do so prior to or during your meeting — whichever is most comfortable to you.

Additional paperwork

  • With your completed application in hand, your loan consultant will run your information through a specialized software, Desktop Underwriter, which analyses the data input, and determines if any non-standard information is required for the Underwriting Department.

  • Your loan consultant and processor will work together to prepare and/or obtain additional documents that are specific to your file.

  • Another meeting will be set for your loan consultant to review these additional documents with you and you'll be required to sign these documents.

Submitting your file to underwriting

  • A processor that works with your loan consultant will look over the entire application package, which now consists of your application, your supporting documents, a purchase contract for your new home, all of the additional paperwork you signed, and several other documents that the loan consultant or processor has completed for your file.

  • The documents are organized in a specific manner — called a 'stacking order' — and submitted to the Underwriting Department.  In our case, the file will be submitted electronically.

The underwriter's review

  • The underwriter will review the entire file and, in a nutshell, determine whether you, as the borrower, and the property meet the strict guidelines to which he or she must adhere.

  • In virtually every case, the underwriter will request additional information.  The requested information may be relative to you as a borrower, the property's value, or any other factor of the file.  Bear in mind that it's not only the underwriter's right, but his or her responsibility, to request as much information as he or she feels is appropriate in order to protect the investors who'll be lending this money to you.

  • Once the underwriter's review is complete, these requests for additional information constitute 'conditional approval' and the file comes back to your loan consultant and processor.

Answering the conditions

  • Your loan consultant and processor will review and then respond to the underwriter's conditions.  This may require you to provide additional information, which you should do without delay.

  • Their compiled responses to the conditions will be sent back to the underwriter, and the underwriter will advise as to whether or not the responses are satisfactory.

  • The team may go back and forth once or twice more, to ensure that everything is in order, and, once everything is complete to the underwriter's direction, you're file will receive a 'clear to close.'

  • At this point, the lender will firm up a closing date and your loan officer should consult with you about this.

You've been cleared to close!

  • Once the underwriting team gives us the clear to close, additional documents — closing documents — will be prepared and sent to the closing agency, either a title company  an attorney.

  • The closing agent will review these new documents and prepare your closing statement also known as the HUD-1.  The HUD will be forwarded to your loan consultant, the underwriter, your Realtor, and perhaps others, for review to ensure accuracy. 

  • Once involved parties concur that the HUD is accurate, your loan consultant will provide you a copy and explain each item to you.

  • The closing agent will set the time of day for your closing.

The Closing

  • Closing typically occurs at the office of the closing agent.  Any representatives you wish to have present, such as your Realtor, are welcome to attend with you.  Sometimes the seller will be present; other times the seller will sign the paperwork beforehand.

  • In any event, you need to bring identification and anything else the closing agent has directed with you to the closing.

  • A good closing agent will explain each document presented to you for signature and answer any questions you have.

  • Unless other arrangements have been made, the keys to your new home should be given to you at this final meeting.

Your new home

  • Your new home is … well … YOURS, and congratulations are in order.

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