By Mike Boghos
For many, the thought of going through the process of getting a mortgage is terrifying. Most that have not gone through the process, don’t know what to expect unless they have talked to others who have been through it.
Some will tell you horror stories about their experience and scare you away from it. Don’t let this happen to you! I am here to tell you it is not as bad as people make it out to be.
STOP believing what others are telling you! It’s simply not true. The mortgage process is only as complicated as your mortgage loan originator makes it. That is where it all starts.
Do your research!
When starting your search for a home, the first step is to get pre-approved. Before you call on a mortgage company to take your pre-approval, do some research on the company.
You want to make sure they are a reputable company to do business with.After all, this is a big financial decision in which you are making.
You owe it to yourself to make sure you are working with an expert in the business.Too many times before, have I heard the horror stories that some folks have experienced. 99% of the time, it was due to poor customer service, lack of knowledge, and/or lack of communication from their mortgage company.
Once you have done your research and decided who you are going with, it is time to give the mortgage loan originator a call to start the pre-approval process.
Some lenders prefer you to fill out the application online; However, I recommend you stay away from this.It is best to take the application over the phone with the mortgage expert who can answer any questions you may have.
This also gives you an opportunity to get to know your mortgage loan originator to make sure he or she is an honest and trustworthy person.The loan application should take no more than 15-20 minutes of your time.
Once you have completed this, the mortgage loan originator will then take the time to review your information and determine if you are qualified for a loan and how much you are qualified for.
They should be able to have an answer to you within 24 hours or less. In my business, I usually am able to issue pre-qualification within a few hours.Once you have the pre-qualification it is time to work on turning it into a pre-approval.
Yes, there is a difference between a pre-qualification and a pre-approval and you need to know the difference!
A pre-qualification document is based on what you tell the mortgage loan originator and nothing has been verified. It is based on the verbal information you have given. If you aren’t truthful about your finances to your mortgage loan originator then this qualification will change and essentially is misleading.
A pre-qualification is a good first step to getting an idea of what you are qualified for; However, you need to get this turned into a pre-approval as soon as possible! So, what is the difference? Verified documents.
A pre-approval is your approval with verified information.
Everyone must have a pre-approval (not a pre-qualification) before you go under contract on a home.
These documents many times include:
Two years of W-2s and/or 1099s
Most recent two months of bank statements
Most recent 30 days of pay-stubs
Two years of tax returns
Copy of your driver’s license
Copy of your social security card
The faster you send in these documents to your mortgage company, the faster your pre-approval with come out. It is best to knock this out as soon as you can.
The documents needed can vary based on the loan program you are applying for, but these are the basic docs needed for most loans. Also, if you take a long time to find a home after you have been issued a pre-approval, the bank statements and pay-stubs will need to be updated to the most recent copies.
Call your Realtor!
Now for the fun part! You have completed the hardest part of the process, getting pre-approved for the loan.
You are now free to start looking for homes within your pre-approved budget. This is where your realtor comes into the picture. Your realtor will be able to help you find the perfect home and negotiate a great purchase price.
Once you have done so and come to an agreement, you will then go under contract. Once the contract has been completed and signed, it will then need to be immediately sent over to your mortgage loan originator so he/she can get started on getting your loan processed and approved.
The whole process of getting your home could take an average of 30 days unless you run into some major issues along the way.
The DOs and DONTs
So, what are the ways you can ensure you have a smooth ride into your closing date? Take a look here on one of the previous articles of the Do’s and Don’t’s during the loan process.
Wait for the Approval…
Now that your contract is in and you have reviewed the do’s and don’t’s, your loan will be submitted for underwriting.
The appraisal will get ordered to determine the value of the home you are purchasing, title work will be ordered, and all other third party information required will be completed.
Underwriting is where they review all of your information and determine the risk of lending you the money. They ultimately determine whether or not your loan will be approved.
Allow three to four business days in underwriting before you get an answer. Once the underwriter has reviewed the file, they will come back with either a full approval (rare), approval with conditions (most common), or a denial.
A full approval means you are good to go and the underwriter does not need any further information to clear your loan for closing.
Approval with conditions means you will be approved as long as you can provide the underwriter with the additional information they have requested for you to complete.
Last, a denial means you are not approved for the loan. If this happens you will receive the reasons why you were denied. Talk to your mortgage loan originator to review your options after a denial.
Once the final approval is in, the closing disclosure will be generated and sent to you for final review. This is where you will see your final numbers of what you will be bringing to closing.
As long as you are happy with the numbers, your loan is ready to close!
Now it is time to sit back, relax, and go have fun at your closing celebration with your realtor and mortgage loan originator!
Typically, you will get the keys to the house once you have signed all the paperwork necessary at your closing. The loan process you experience should be smooth and enjoyable.
As long as you have an expert in the business working for you and “holding your hand” throughout the entire loan process, you should have a great experience. Providing you, the borrower, with the best customer experience is something I take a lot of pride in.
This is a big financial decision!
It is ok to feel nervous about it, but it is my goal to take those nerves away and ensure that you have nothing but excitement! Don’t be afraid to purchase a home!
It is a very rewarding feeling and you are now putting your money towards an asset for yourself rather than at nothing when renting. It doesn’t hurt to take a call and see if you qualify!
At worst, if you don’t qualify, we can come up with a plan of action to get you to the point where you do qualify.
Don’t keep waiting or you will never do it. It only takes 15 minutes to get started. Click below to reach me and stay tuned for my next article!
See you next time!
MORTGAGE LOAN ORIGINATOR
Office: (407)636-8557 x208