When shopping for a mortgage it’s amazing how everyone has advice to offer. Among them are industry professionals, friends and family, Internet companies and recent homebuyers. The advice I give is that when shopping for a mortgage professional, the last thing you want to consider is, believe it or not, interest rates.
Interest rates change daily, sometimes several times a day. The rates vary based on loan type, credit score, loan to-value percentage, debt-versus-income ratios, property type, down-payment percentage, location of the property and several other criteria. Therefore, until you have chosen a property type, location, lock term, agreed on a purchase price, loan product and actually locked in the loan, nothing is guaranteed. An interest-rate quote is simply that, a quote! What follows is a recap of what the process typically consists of.
Pre-qualification. You will speak with a licensed loan professional who will review your income, assets, job history and other areas to evaluate your “buying power.” It is important now to discuss any questions or concerns with your loan professional.
Application. You will speak with a licensed and trained mortgage professional to complete your loan application. This can be done online, in person or over the telephone. This procedure will require some time and is a more detailed then the prequalification process. Be certain to review the documents for accuracy, and address any questions you might have with your loan originator. I advise discussing “locking” versus “floating” a rate at this stage.
Submission. After your loan application is completed, a loan processor verifies that all information is correct by obtaining verifications of employment from your employers and Tax IRS transcripts from the IRS. Your loan package is then submitted to the lender and assigned to an underwriter for review.
Approval. The lenders’ underwriter reviews your loan package to make sure it meets the criteria for approval. If everything is acceptable, the underwriter will issue a commitment letter. Additional conditions generally are requested now and will be requested from you. The loan commitment is now delivered to you and your attorney. Once the additional condition items have been submitted, the file is returned to underwriter, along with the property appraisal report for final review.
Preparing for closing.
Upon final review and clearance of all outstanding conditions, your attorney will discuss a definitive closing date with all parties and the lender will schedule the file to close. Most lenders require a minimum of 96 hours’ notice to prepare closing documents. You will receive the CD (closing disclosure) with all the final numbers and cash needed to bring to the closing. The CD must be delivered to you 3 business days prior to the closing. Immediately review this document and address any questions or concerns with your mortgage professional and attorney. Your real-estate agent will meet you at the property to complete a walkthrough, generally the day of or the day prior to the closing. This is the time you will need to discuss any damage to the property or if any items were removed that were contracted to stay.
You should arrive at the closing approximately 15 minutes early, prepared with the certified checks or wire transfers you discussed with your attorney. Be prepared to sign multiple documents and always remember to ASK questions. Never sign a document that is not fully completed, and always retain a copy of all documents. Once the questions and signatures are completed, monies will be exchanged, and you will receive the keys to your new home!
The founder of A.S.A.P. Mortgage Corp., Irene Amato has been a Westchester Magazine Best Businesswoman and Best Mortgage Broker, having also received the General Excellence award from 914INC. In 2013, she was named Broker of the Year by the NYAMB and Affiliate of the Year by HGAR.