PRE-APPROVAL/APPLICATION –
We are always happy to pre-approve you and there is never any cost or obligation. It entails a 10 minute loan application either over the phone or online. We do pull credit for a pre-approval. The pre-approval lets you, your agent, and the seller know that you are a qualified and serious buyer. It is important when completing a loan application to let us know of any issues you have had including tax liens, bankruptcies, foreclosures, etc. We encourage all clients to tell us everything so we can review the information and help solve any potential problems up front.
CONTRACT TIME FRAMES –
The minute you have a contract on a home you should let us know. It is important to note you may not close for 45-60 days however most (99%) contracts have a finance and appraisal contingency. These contingencies or timelines can be as short as 14 days however more often than not the time frame is 18-21 days. This is a contractual obligation on your part to have the loan approved and the appraisal completed and satisfactory within this timeline. It is important to know that we have to move fast once you have a binding contract to ensure we meet these deadlines. The clock starts ticking the day you execute or “bind” the contract. We always recommend you turn in all requested paperwork within 3 business days of the
executed contract date.
RATES AND LOCKING A RATE –
Rates change daily and sometimes during the day as well. It is important to understand when receiving a quote that the quote is valid right then and there and can change depending on the market. Different programs have different rate options, meaning some programs may have lower rates or higher rates than other programs. Different down payments also have different rate options. Locking in a rate means that the rate is protected and will not adjust. Your interest rate is typically locked once you have:
1. A property address under contract and
2. A firm closing date.
We are always happy to provide updated numbers as you find a home you like. Just give us a call or email us.
PROCESSING –
Once you are under contract with a new home and your rate is locked in we will send you documents to sign and send back as well as a list of items we will need to underwrite your loan. The term “processing” refers to our team organizing this paperwork and preparing it for an underwriter to review. This process can take anywhere from 2-4 business days. Once your loan is organized/processed we will send it to the underwriter.
UNDERWRITING –
The underwriter is the individual who reviews all of your paperwork including income docs (such as tax returns, pay stubs, etc), asset docs (bank statements, retirement accounts), etc. They are the ones who will give “approval” on the loan allowing you to move forward and close. This process typically takes 3-5 business days once the loan has been processed by our team.
APPRAISAL–
An appraisal is a third party analysis of the home verifying the value of the home. An appraisal is done to ensure you are paying a fair market price for the home. It is illegal for anyone with an interest in the sale of the home including bank employees, loan officers, etc to make direct contact with an appraiser. Appraisals are completed by neutral third party vendors (appraisers). You will receive a copy of the appraisal once it is complete. The appraisal is paid on your credit card and is non-refundable. Prices can vary but in general an
appraisal costs around $400.
PULLING CREDIT –
We always recommend pulling credit and doing a full loan application up front. It is better to know in advance if there are any surprises or issues we need to resolve. Time to resolve issues is a good thing in the mortgage business. In general the report is good for 90 days and depending on the situation can be good for as long as 120 days. We don’t re-pull credit if you’re past the 90 days until or unless you are binding on a contract. That way at most only 2 reports are pulled on your file. We also offer “rapid rescores” which is an option to potentially improve your credit within a week or two. Call or email for details. DO NOT LET ANYONE PULL YOUR CREDIT once you’ve applied for a mortgage… Fannie Mae & Freddie Mac require complete debt monitoring for all loans through the loan closing date. Please note that banks can and will now be notified if any new credit has been issued on existing loan files. This notification procedure is in effect until the loan is closed and if any new credit was issued, this could delay/stop the loan closing because any new credit inquiries or new credit accounts opened will have to be added to credit report and resubmitted to underwriting.
VERIFYING FUNDS -
The toughest part of getting a mortgage today is documenting funds in checking/savings/retirement accounts. New Fannie and Freddie Mac guidelines REQUIRE we verify ALL NON PAYROLL DEPOSITS.
What does this mean to you?
Following these instructions will dramatically improve your mortgage experience. If you deposit money into your account that is NOT a payroll deposit we have to get copies of the checks and signed letters of explanations for every single deposit. This includes deposits as small as $100.00. It can slow down and/or stop the process completely.