NH Real Estate Financing Resources
The Loan Process - Start To Finish -
Seven Steps To A Mortgage
Prequalification
"Prequalification" occurs before the loan process actually begins, and is
usually the first step after initial contact is made. In a prequalification, the
lender gathers information about the income and debts of the borrower and makes
a financial determination about how much house the borrower may be able to
afford. Different loan programs may lead to different values, depending on
whether you are qualified for them, so be sure to get a prequalification for
each type of program you are suited for.
Application
The "application" is actually the beginning of the loan process and usually
occurs between days one and five of the loan. The
buyer, now referred to as a "borrower", completes a mortgage application with
the loan officer and supplies all of the required documentation for processing.
Various fees and down payments are discussed at this time and the borrower will
receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL)
within three days which itemizes the rates and
associated costs for obtaining the loan.
Opening The File
This occurs between days 3 and 10. At this time the lender orders a property
appraisal, property survey and credit reports, mails out requests for
verifications, if necessary, for employment (VOE) and bank deposits (VOD) and
any other documents needed for processing of the loan. All information supplied
by the borrower is reviewed at this time and a list of items
not yet received is compiled.
Processing
Processing occurs between days 5 and 25 of the loan. The "processor" reviews the
credit reports and verifies the borrower's debts and
payment histories as the VODs and VOEs are returned. If there are unacceptable
late payments, collections for judgment, etc., a written explanation is required
from the borrower. The processor also reviews the appraisal and survey and
checks for property issues that may require further discernment. The processor's
job is to put together an entire package that may be
underwritten by the lender.
Underwriting
"Lender underwriting" occurs between days 15 and 25. The underwriter is
responsible for determining whether the combined
package passed over by the processor is deemed as an acceptable loan. If more
information is needed, the loan is put into "suspense" and the borrower is
contacted to supply more documentation.
"Mortgage insurance underwriting" occurs when the borrower has less than 20% of
the loan amount to put towards a down payment. At this time, the loan is
submitted to a private mortgage guaranty insurer, who provides extra insurance
to the lender in case of default. As above, if more information is needed the
loan goes into suspense. Otherwise it is usually returned back to the mortgage
company within 48 hours.
Pre-Closing
"Pre-Closing" occurs between days 20 and 30. During this time the title
insurance is ordered, all approval contingencies, if any, are met, and a closing
time is scheduled for the loan.
Closing
Closing usually occurs between days 30 and 45 of the loan. At the closing, the
lender "funds" the loan with a cashier's check, draft or wire to the selling
party in exchange for the title to the property. This is the point at which the
borrower finishes the loan process and actually buys the house.
Closings occur at different places in different states. For instance, some
states require that the closing take place at a closing attorney's office while
others use a title or escrow company.
Buying
a home is one of the biggest investments you will ever make.
Let Tinkham Realty represent you in helping you find
the perfect home. Call today!
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