Pre-Approval
This is the first step into home ownership. Many clients thinking looking for a home is the first step then talking a finance company but really this should be the first. During this process there are 3 vital parts we are looking at. We first take all the information of our client for the past 2 years. We will need personal information from date of birth to social security name as well as full legal name. Then we move on to the two year history. We document where our clients resided for the last 2 years as well if they rented or owned.
We document where they have worked the last 2 years. Is this in the same field or did they change jobs. We also talk about money for closing. Is it coming from a verifiable source as in checking, savings, stocks, bonds, 401Ks, etc. If it is something that can be liquidated and documented we can use that money for the transaction. We are not allowed to use credit cards or personal lines of credits that are not secured by anything. Now that we have the credit, income, and assets we can place the clients in the particular loan type based on the information we talked about. The client now knows they payments in price range they are looking to be in. So are officially pre-approved.
Contract and Processing Stage
This is the next stage of the process as you were just pre-approved and found your dream home. You agreed upon the price and you gave your deposit and are officially under contract. We will not start to get the loan commitment for the particular loan type we pre-approved you for. This stage we now prove everything to the bank on the items in the pre-approval stage. So we will now request the following information to back up the documents.
- Driver’s License
- 2017 and 2016 Federal Tax Returns and W2s
- 30 days’ worth of paystubs
- 2 months’ worth of asset statements.
We will also order appraisals and title commitments on the property during this stage. Our processors gather all the documents and do their verifications of those documents and we submit the loan to underwriting.
Loan Commitment Stage
The underwriter has now approved our loan submission and we can now issue a mortgage commitment to the selling party. What this means is that all the documents we turned in and the loan applied for we have a conditional approval from the underwriter. The underwriter might have questions and concerns on the loan commitment that we must work to answer after they reviewed the documents. We cannot get to the next stage if all the questions and conditions are not answered. They will also review the appraisal and any inspections required for the loan.
Clear to Close
Once everything is satisfied the underwriter will issue a clear to close on our loan file. At this time the banks closing department and the title company are balancing all the fees and loan terms in order to have all the documents are sent to closing. We will contact the borrower with their final rate, terms, and cash to close to bring for closing.
Closing
This is the final stages of home ownership where everyone meets and exchanges the keys for the property. The borrower will now sign their final loan papers that will get recorded in the courthouse to officially make you the owner of the property.
